Enron’s dirty dealings again earn plenty of ink on the nation’s front pages. The New York Times’lead states unequivocally that, as Enron was fading fast, in late October and early November, the company’s president asked the Treasury Department to persuade creditors to lend the company more money. Peter Fisher, undersecretary of the treasury for domestic finance, reportedly refused to help. The Washington Postoff-leads Enron, going instead with President Bush’s “recess appointments,” two appointees—one to State, one to Labor—installed yesterday, while Congress is at rest. The Los Angeles Times(on the Web, at least) leads with an al-Qaida cell busted up last month in Singapore. The group was targeting American military and business concerns on the island.
Enron … What next? The company denies that it appealed to the Treasury Department for help with creditors, according to the NYT lead. A spokeswoman said the calls to Fisher were “informational,” meaning Enron, the nation’s seventh largest company (then), just wanted to keep Treasury abreast of the sad situation. Fisher also got calls from Robert Rubin, Clinton’s treasury secretary and now a suit at Citigroup, one of Enron’s biggest creditors, who was just wondering if Fisher might feel like calling credit-rating agencies and asking if they could go easy on Enron. Fisher said “Guess again, Bob,” and the discussion ended there, according to the NYT. Robin claims that he prefaced his question by saying that he didn’t think it was a good idea for Treasury to get involved, the Post reports.
The Post off-leads a concise history of Enron’s debt-hiding strategies, dating back to 1997. Outside partnerships, named after Star Wars characters, were central to the scheme. “A pivotal question is whether Enron executives misled investors by inflating revenue and minimizing debts through the use of scores of off-the-books partnerships such as Chewco and Jedi during a three-year growth spurt that made it one of Wall Street’s darlings. Investigators also are asking exactly how much Enron’s accounting firm, Arthur Andersen, knew about and approved of the Chewco partnership.”
The NYT stuffs a companion piece about paper-shredding practices at accounting firms. There are no definite standards, and many documents of lesser importance are shredded after an audit is completed, but it’s clear that once a government investigation relating to an audit begins, all papers must be held. It was reported on Thursday that Arthur Anderson was still shredding Enron documents in November, after the SEC investigation of the company had begun.
The WP lead reports that George W. slipped Otto Reich and Eugene Scalia (Antonin’s boy) past the guard on Friday, installing them to posts in State and Labor, respectively, without congressional approval. Tom Daschle called the sneak-ins “regrettable,” but the Post points out that Clinton used the same strategy with some of his less popular picks. Labor groups and congressional Democrats charged that Scalia’s “dismissal of existing rules on workplace injuries as ‘quackery’ based on ‘junk science’ made him unsuited to be the nation’s chief enforcer of rules designed to protect workers,” according to the Post.
Everybody fronts Ford’s plans to close five of its 44 North American plants and shed 35,000 employees. According to the NYT, fewer employees will mean fewer cars: Ford will cut its yearly output by a million and discontinue two warhorses, the Ford Escort and the Lincoln Continental.
The papers also front the hockey-dad verdict (guilty). Thomas Junta can expect 3 to 5 years in prison (though the max is 20) after being convicted of involuntary manslaughter, according to the LAT. (He’s a first-time offender.) The NYT and the LAT wisely provide the dimensions of both men—Junta, 270 pounds, Costin (the victim), 156—thereby puncturing Junta’s view that he was merely defending himself. Of course, Junta was sitting on Costin’s chest when the fatal blow was delivered, further discrediting a self-defense claim. The two men had started arguing after their sons’ practice game, according to the NYT. The point of contention: Junta thought Costin’s boys were playing too rough.
Bill Keller uses his NYT op-ed column to say good riddance to “Mr. T, Mr. G and Mr. H”—Thurmond, Gramm and Helms—who will all be leaving office this year. “Let’s be frank,” he writes. “They will leave behind an institution they have helped appreciably to debase.” He has numerous examples.
Finally, The LAT stuffs new FAA standards for cockpit doors, which the airlines will have until April of 2003 to get opening and closing on all 6,000 of their aircraft. The new doors protect against some things (shrapnel from a grenade, for example), but not others (like plastic explosives). “To our disappointment, there is no blast-resistance standard,” says the president of a blast-resistant door company. Worse still, the doors are supposed to be bash-in proof, but in fact persistence will still be rewarded on all flights. “The new doors could withstand a couple of hits by a 250-pound man but maybe not a third,” the LAT says. Don’t fly with hockey dads.