Roundup: U.S. Enron Scandal Expands With Death of Former Executive

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Roundup: U.S. Enron Scandal Expands With Death of Former Executive

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The collapse of Enron Corp., the biggest bankruptcy case in U.S. history, took on another dimension of tragedy on Friday with the apparent suicide of a former vice chairman, who had opposed the company's financial practices that led to the collapse of the energy trading giant.

J. Clifford Baxter, 43, who resigned as vice chairman of Enron Corp last May, killed himself with a gunshot inside his car in the suburb of Houston, police said.

Baxter last spring had complained to Enron's management team, including the then chief executive officer Jeffrey Skilling, about the company's questionable accounting measures.

Baxter joined Enron in 1991 and was chairman and CEO of Enron North America before being named chief strategy officer. In October 2000, he was promoted to vice chairman.

Baxter was one of the 29 senior Enron executives named in a shareholder lawsuit seeking compensation of losses due to the collapse of the company. He sold more than 577,000 shares, the lawsuit said, worth 35.2 million dollars over a three-year period before the bankruptcy.

Enron said in a short statement that the company was "deeply saddened" by Baxter's tragic loss.

A former Enron employee, who was laid off by the company in December, said the timing of Baxter's death has something to do with the investigation around Enron's collapse.

His death came one day after the start of congressional hearings on Enron's collapse and the role of its auditor, accounting firm Andersen. Hearings by the House Energy and Commerce Committee and another by the Senate on Thursday were the first of nine scheduled over the next six weeks into Enron.

Baxter was one of a handful of current and former Enron executives whose testimony is central to federal and congressional investigations. Congressional investigators were contacting Baxter 's lawyers and sought to interview Baxter next week.

"It seemed to us that he was a pretty highly placed insider at Enron who had understood exactly what was wrong there," said Representative James C. Greenwood, chairman of the House committee 's Oversight and Investigations Subcommittee. "It adds to the depth of this tragedy."

The political influence of the two firms came under renewed scrutiny on Friday, with the reporting that of the 248 senators and Congressmen on 11 congressional committees investigating the firm, 212 received political donations from Enron and Endersen.

The White House on Friday ordered a review of 70 million dollars in U.S. government contracts with Enron and Andersen. The director of the White House Office of Management and Budget, Mitchell Daniels, said that media reports of "potential irregularities" in work done by Enron and Andersen could "reflect poorly on ... their ability to provide quality work."

White House spokeswoman Claire Buchan disclosed that the U.S. government had more than 100 contracts worth about 70 million dollars with the two companies.

Enron freely gave donations to both Democratic and Republican politicians, but the Bush administration has close ties to Enron and its chairman, Kenneth Lay. The company reportedly made some 623,000 dollars in contributions to Bush's campaigns since 1993 when he launched his political career as governor of Texas.

In another development, Congress' top investigator said on Friday he will decide next week whether to take the Bush administration to court for withholding details about how it developed its controversial energy policy.

"If we did go to court, it would be the first time in history that we would have ever taken a federal entity or official to court. We need to try to do everything we can to avoid it. But we' re committed to do our job," said David Walker, head of Congress' General Accounting Office.

Congressional Democrats John Dingell and Henry Waxman released a letter on Friday urging Walker, whose office is Congress' investigative arm, to file suit against the office of Vice President Dick Cheney. The two congressmen for nine months have been demanding identities of business leaders and lobbyists who met with Cheney's task force as it developed the energy plan.

Waxman and Dingell wrote that task force details were vital to congressional consideration of energy policy, "particularly with recent questions concerning the influence of officials of Enron."

The Houston-based Enron group filed the largest bankruptcy in U. S. history on December 2, hammering investors, destroying thousands of jobs and raising questions about its ties to Bush.

So far, the collapse of the nation's seventh largest company has qualified as a financial scandal from the aggressive accounting practices that misled investors to the frantic shredding of Enron financial documents by Andersen. However, news coverage of the case has been fueled by the assumption that scandalous disclosures could follow because the company's money was so intertwined with Washington power.

"There are so many ties between Enron and the White House and the Congress that it's impossible to ignore," says Larry Satato, a University of Virginia political scientist.

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