Date: 1/11/02 2:41:04 PM Pacific Standard Time
From: (American Patriot Friends Network)

From: Mike Ruppert -
To: From The Wilderness
Sent: Friday, January 11, 2002 1:20 PM

Enron Exploding – May Connect to Money Laundering


by Michael C. Ruppert

FTW January 11, 2002 – Even as Attorney General John Ashcroft today recused
himself from involvement in any Justice Department investigation into the
mushrooming Enron scandal, larger conflicts of interest – potentially more
damaging to the Bush Administration -- are becoming increasingly apparent.
The conflicts involve the Chairman of the Securities and Exchange Commission
(SEC), Harvey Pitt and the head of Congress’ investigative arm, the General
Accounting Office (GAO), David Walker. Both agencies are charged with
investigating allegedly criminal behavior by the energy trading firm,
once the seventh largest company in America, which has now become the
single largest bankruptcy in world history and may soon become the
largest financial and political scandal in American history.

As new revelations of Enron’s unethical and insider-based improprieties,
apparently facilitated by more than $2 million in Bush campaign donations,
continue to flash across TV screens on a daily, sometimes hourly, basis --
more serious allegations of criminal money-laundering activities by a
respected financial expert suggest that what is already known about Enron’s
behavior is but the barest tip of a razor sharp iceberg that could sink the
Bush presidency.

Spokespersons for Pitt and Walker both denied to FTW in interviews on January
10 that there is any reason for the heads of these two agencies, long regarded
as the last and best protections against unchecked government corruption, to
recuse themselves from Enron investigations even though their respective
agencies have key statutory obligations to investigate the growing scandal.

SEC Chairman Harvey Pitt, who took office in August of this year, after most
of the acts leading to the Enron collapse had been committed, was, according
to a Jan. 9, 2001 report by the Center for Public Integrity, a  partner in
the law firm of Fried, Frank, Harris, Shriver and Jacobson. In that capacity
he represented accounting firm Arthur Andersen, Enron’s auditor, which
disclosed in a press release dated yesterday, that “in recent months
individuals in the firm involved with the Enron engagement disposed of
a significant but undetermined number of electronic and paper documents
and correspondence related to the Enron engagement.”

This is significant because Andersen, one of the big five accounting firms,
had routinely signed off on falsified financial statements concealing almost
$20 billion in “off-balance-sheet” debt from stock and bond holders,
regulatory agencies and Enron employees. Many of Enron’s pre-bankruptcy
20,000 employees were barred by the company from cashing in their 401(k)
retirement plans, primarily consisting of Enron stock, while key
executives including Chairman Kenneth Lay, former President and CEO
Jeff Skilling, and CFO Andrew Fastow reportedly personally made more
than $1 billion selling Enron shares before the collapse.

SEC spokeswoman Christi Harlan told FTW, “The Chairman filed an agreement
that he would recuse himself from votes in any matters where he had a
conflict of interest. The investigation is being run by the enforcement
division and they keep him [Pitt] advised.

“Once the Commission launches an investigation to go forward they just do
their thing. There’s no requirement for a vote until an action is

Harlan stated that the enforcement division acts autonomously from any input
from the Chairman’s office and that the head of the division has management
oversight for any investigations. This appears to be a different SEC practice
from the long-respected partnership of SEC chairman Arthur Levitt and
enforcement director Richard Walker who were known as a team for their
single-minded and thorough non-partisan investigation of securities
violations in the 1980s and 90s. Walker was recruited by Deutschebank
shortly after the attacks of
September 11th, 2001.

When asked if, in spite of his past representation of Andersen, Pitt was
confident that there would be no conflict of interest or any resultant
influence on the Enron probe, Harlan said, “Absolutely!”

Comptroller General of the United States David M. Walker, who heads the GAO,
has an even more obvious dilemma. Until November 9, 1998 he was a partner,
board member and global managing director at Andersen. As persistent
questions bubble about Andersen’s possible complicity in Enron’s criminal
falsification of
financial statements Walker’s past relationship with Andersen management
raises a question about his own ability to investigate in an unbiased

GAO spokesman Jeff Nelligan told FTW, “There is no link, no reason to recuse
at all. When Mr. Walker was at Arthur Andersen he had nothing to do with
Enron and he left well before all of this took place. He’s been gone for
three plus years now.”

The possibility that Walker had no knowledge of Enron activities (Enron was
Arthur Andersen’s second largest account paying Andersen some $52 million
last year) is questionable given his position as a director and board member.
And the statement that he was not at Andersen when Enron’s financial
statements were being falsified is flatly contradicted by a 2001 Enron
corporate filing with the SEC (form 8-K) which states that “Enron will
restate its financial statements from 1997 to 2000 and the first and second
quarters of 2001” to account for the fraudulent or grossly negligent
financial statements given to the SEC by Enron executives and certified by

Walker was on the board of Andersen for almost two years while Enron was
cooking the books and Andersen was signing off on it.

Many of the Andersen connections and possible improprieties have been noted
by Rep John Dingell (D), MI the ranking member of the House Energy and
Commerce Committee. On December 5, 2001 Dingell wrote to Pitt with a series
of detailed accounting questions that, when addressed in any one of eight
announced Enron investigations, cannot help but draw Andersen deeper into
the controversy.


A January 3 letter from Vice President Dick Cheney (former CEO of oil
construction giant Halliburton) to California Congressman Henry Waxman
disclosed that between January and September of 2001 Enron executives,
including Lay, had met on six occasion with Cheney’s National Energy Policy
Development Group. The letter did not disclose details of the meetings but
did reveal that the last such meeting occurred on October 10th just six
days before Enron publicly announced the hidden debt, triggering the
collapse of its share price.

The October 10th meeting was approximately two weeks before Enron’s Chair,
Ken Lay made calls, as reported by the Associated Press on January 10, to
Treasury Secretary Paul O’Neil and Commerce Secretary Don Evans to discuss
the fallout from Enron’s pending collapse. Lay is a long-time personal
friend of George Herbert Walker Bush and has headed the company which has
given over $2 million in hard and soft campaign donations to George W. Bush
and the Republican Party since 1999.

A pending constitutional crisis loomed this summer as the GAO and Waxman moved
closer to suing the Vice President for refusing to let Congress know what his
energy task force was debating behind the same closed doors that proved to be
no barrier for Enron. Waxman’s letters, frequently copied to Dingell and
Walker, established a robust paper trail closing off avenues of escape for
the Administration in its repeated refusals to cooperate.

A January 10th letter from Waxman to Attorney General John Ashcroft inquiring
about his acceptance or more than $75,000 in campaign contributions from Enron
during his 2000 Senate campaign from Missouri was followed, within hours, by
Ashcroft’s announcement that he would have nothing to do with the Justice
Department’s investigation of Enron. However, Ashcroft has chosen the less
aggressive investigatory tactic of creating an in-house task force to
investigate Enron, rather than empanelling a grand jury capable of bringing
criminal charges.

As of press time the Department of Justice has not returned a call from FTW
asking why the less aggressive approach was chosen.

Other Bush figures connected to or having a financial stake in Enron include
Presidential advisor Karl Rove, U.S. Trade Representative Robert Zoellick
(formerly on Enron’s advisory council) and multi-millionaire Secretary of
the Army Thomas White who is a former Enron executive. Lawrence Lindsay,
the President’s economic advisor, formerly served on an Enron advisory board.
The newly elected Chairman of the Republican Party (RNC), former Montana
Governor Marc Racicot, is Enron’s former chief lobbyist with the firm of
Bracewell and Patterson. Racicot has indicated that he will not sever his
relationships with the firm and may continue to lobby as he leads the
Republican Party. As RNC he has unobstructed access to all key decisions
and votes made by Republican members of Congress.

Racicot is not subject to any governmental regulation or oversight because he
is not a federal employee.

Enron influence throughout the Bush Administration is nearly ubiquitous.
Several news stories have reported that CEO Lay, who had supported Bush
since his first run for Texas Governor has actually cast an imperial
thumbs up or thumbs down on cabinet-level appointees and key regulatory
officials including the head of the Federal Energy Regulatory Commission
which controls electrical rates for providers and oil, gas and electricity
movements throughout U.S. markets.


When asked about Justice’s decision to create a task force instead of
convening a grand jury, a former federal prosecutor with experience in
government corruption and energy matters told FTW, on condition of anonymity,
“I’m a little relieved by Ashcroft’s recusal but a task force is not a
grand jury and cannot charge criminal offenses. There is still one or more
steps removed from actual criminal charges. Given the evidence of criminal
behavior a task force, then, is less than a perfect solution. It’s not
really any solution.”

The former prosecutor added that Andersen’s destruction of records, “is
extraordinary. Andersen has known for many months that documents in their
possession might very well become the subject of civil and criminal
discovery. It was incumbent upon Andersen, at the moment that it knew that
these documents might become a part of litigation, to suspend their records
retention schedules. It was Andersen’s lawyers’ duty to advise Andersen to
err on the side of retention. That is considered ‘best practices’ for
record retention in virtually every major company. The decision makers who
failed to flag the documents at the proper time critically ill served the

Catherine Austin Fitts, a former Assistant Secretary of Housing and Urban
Development (HUD) and a past Managing Director of the Wall Street investment
bank Dillon Read noted that Enron’s trading patterns, internet money movements
and [other activities] were consistent with a large-scale money laundering

She told FTW, “The fact that subpoenas were not issued months ago to obtain
all Enron Online off shore and onshore digital and paper trading records and
corresponding bank records defies logic, unless one presumes that Enron's
generous donations have bought them time for a shredding party that
protects all the beneficiaries of the real dollars that flowed through the
Enron money pipeline. If my years working on the clean up of BCCI and the
S&L crisis taught me one thing that I would communicate today to the
shareholders, retirees and employees who have been harmed, it is this:
People like the people on the board of Enron absolutely make money on
insider trading, bid rigging and fraud, and they do so with help from
the highest levels. They are superb at financial fraud because they are
superb at persuading people that they are respectable and legitimate.
The money they steal buys a lot of respectability.

“Presume the worst form of fraud and criminal enterprise is plausible. If
not, then we are looking at gross negligence that, according to traditional
standards of fiduciary responsibility, in fact constitutes criminality and
fraud. Either way the specifics come out -- intentional fraud or gross
negligence -- the Enron board and management are criminals.  That is a fact.
The rule of law says that they should be held to the same standards of
accountability as the millions of people they and their institutions have
evicted from their homes, thrown into jail, denied health care and jobs or
had burnt at the proverbial stake. The rule of decency says that any
American who will continue to do business or associate with these
individuals is part of the culture of corruption that has neatly
disconnected action from accountability.

“I will bet every last dollar I have that Enron was the largest laundromat of
stolen and tax evading dollars in American history and that the Department of
Justice's primary goal is cover-up --- to make sure that the money trail
disappears forever.”

Fitts is also well qualified to speak on issues of government impropriety.
She has recently successfully beaten a five-year Department of Justice attempt
to destroy her reputation after she had discovered mismanagement of government
funds and other improprieties at HUD in the mid 1990s. Her ordeal has recently
resulted in statements completely exonerating her and revealing that there
was no legal basis for the government to have begun the investigations of her
company, Hamilton Securities, in the first place. Emerging from the ordeal as a
recognized innovative thinker on economics, Fitts routinely consults with
major economic-financial research groups in the U.S. and Europe and has just
participated in the New York Times drug policy forum with Nobel Laureate,
economist Milton Friedman.

Michael Ruppert is the Publisher/Editor of “From The Wilderness,” a monthly
newsletter read in 27 countries and by two committees and 20 members of the
U.S. Congress. He may be reached at

The FTW web site is located at

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character to the end of my career. I mean to do this with absolute disregard
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individual man with all the good or evil that may betide him, in comparison
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too much, and no man can fall too soon, if he suffer or if he fall, in the
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