logo
Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Enron''s pre-bankruptcy calls for rescue were more numerous

By cpowell
Created 2002-01-12 08:00

WASHINGTON, Jan. 11 (Reuters) -- Citigroup Inc. executive
and ex-Treasury Secretary Robert Rubin called a top Treasury
Department official on behalf of troubled Enron Corp. in
early November, the Treasury Department said on Friday.

The call was the second disclosure by Treasury on Friday
of apparent attempts to lobby Treasury Under Secretary for
Domestic Finance Peter Fisher on Enron's behalf.

Earlier Friday, the Treasury said Enron President Lawrence
"Greg" Whalley had called Fisher and Fisher "inferred"
that Whalley wanted Fisher to ask banks to extend credit
to the now-bankrupt energy-trading behemoth.

Treasury spokeswoman Michele Davis told reporters that Rubin
had asked Fisher on Nov. 8 "what he thought of the idea of
Fisher placing a call to rating agencies to encourage them to
work with Enron's bankers to see if there is an alternative
to an immediate downgrade.

"Fisher responded that he didn't think it advisable to make
such a call. Rubin said he thought that was a reasonable
position. Fisher made no such call," Davis said.

Michael Schlein, a Rubin spokesman, said Davis' version as
"largely accurate." He said Rubin began the call by noting
"this may not be a good idea," and ended it in agreement
with Fisher that it was not a good idea.

"Bob thought an Enron bankruptcy was an event of national
importance and ... avoiding it was a good thing," Schlein
said.

Rubin is chairman of the executive committee of financial
services giant Citigroup Inc. Citigroup had a financial exposure
to Enron but on Nov. 30 ratings agency Moody's Investors
Services said the exposure was "manageable."

Citigroup and J.P. Morgan Chase & Co. were lead advisers on
Houston-based Enron's planned merger with Dynegy Inc.,
which ended up falling apart. Analysts have estimated that
Citigroup had about $800 million of exposure to the failed
merger, including about $300 million of unsecured exposure.

Rubin served as the 70th treasury secretary, holding the
post from Jan. 10, 1995, to July 2, 1999. His tenure was
widely regarded as a successful one, as he helped preside
over the economic boom of the 1990s and was an influential
shaper of President Clinton's economic policies.


Source URL:
http://www.gata.org/node/1323