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Democrats.com Exclusive: Deputy AG Larry Thompson Tied to Enron

For Immediate Release: January 11, 2001

Democrats.com Reveals that Deputy Attorney General Thompson Had Financial Ties to Enron - and Calls for Special Prosecutor for "Enrongate"

Democrats.com, which publishes a daily Internet news service for Democrats, today revealed that Deputy Attorney General Larry Thompson had financial ties to Enron, and called upon George W. Bush to appoint a Special Prosecutor to investigate the broadening Enrongate scandal.

"Yesterday, it was revealed that Attorney General John Ashcroft received campaign contributions totaling over $61,000 from Enron and its chairman Kenneth Lay," said Bob Fertik, co-founder of Democrats.com. "John Ashcroft took the necessary action, which was to remove himself from the Justice Department's criminal investigation of Enron.

"Ashcroft turned the investigation over to his Deputy Attorney General, Larry Thompson. However, Democrats.com has learned that Larry Thompson also has ties to Enron, which makes it impossible for Thompson to lead an investigation of this importance," said David Lytel, co-founder of Democrats.com.

Thompson worked for the law firm of King & Spalding from 1977 to 1982, served as a U.S. Attorney under the Reagan administration, and returned to King & Spalding as a partner in 1986. Thompson remained at King & Spalding until his appointment as Deputy Attorney General in 2001. According to King & Spalding's Web site, the firm has done extensive work for Enron.

"King & Spalding has represented numerous subsidiaries of Enron, including Enron Global LNG, Enron Global Markets, and Enron Energy Services," Fertik said. "As a former law partner, Larry Thompson profited personally from the firm's work for Enron. Even if Thompson did not work directly on Enron matters - information which is not publicly available - Thompson cannot avoid the 'appearance of impropriety' which is fatal for such an important investigation," Fertik said.

King & Spalding's work for Enron and other energy companies is detailed here: http://www.kslaw.com/practice_areas/prac_energy_matters.asp

Specifically, King & Spaulding

* Represented Enron Global LNG in the long-term time charter of an existing liquefied natural gas vessel from a Norwegian ship owner and in connection with various agreements for the short-term purchase of liquefied natural gas from the Middle East and Africa. The firm also represented Enron Global LNG in the long-term time charter of a new Korean liquefied natural gas vessel from a Belgian ship owner.

* Represented Enron Global Markets in connection with the liquefied natural gas plant to be built in Venezuela.

* Represented Enron Energy Services in providing energy outsourcing and commodity management services to a foreign manufacturing company's North American operations.

According to Lytel, "Thompson's ties to Enron are just one more conflict of interest standing in the way of a thorough investigation of the Enron scandal by the Bush administration. Top officials throughout the Bush administration have close ties to Enron and its chairman, Kenneth Lay. These close ties start at the top, with George W. Bush himself, who received more political contributions from Kenneth Lay and other Enron executives - over $550,000 - than any other donor," Lytel said.

Other top administration officials and close associates of George W. Bush with Enron ties include Attorney General John Ashcroft, Vice President Dick Cheney, former Secretary of State (and Florida recount chair) James Baker, Army Secretary Thomas White, political advisor Karl Rove, and Republican National Chairman Marc Racicot.

Enron's executives are under investigation for numerous problems, including issuing misleading financial statements, and selling large blocks of stock before the company's stock collapsed, while employees were prevented from selling their stock. Yesterday Enron's auditor, Arthur Andersen, revealed that an unknown number of Enron documents had been destroyed. The White House also revealed that Ken Lay spoke with Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans shortly before Enron's collapse.

On January 3, the White House revealed that Enron executives met with Vice President Cheney and other members of the White House's energy task force six times in the months preceding Enron's bankruptcy. On April 17, Cheney met with Lay to discuss "energy policy matters;" the next day, Cheney declared his adamant opposition to electricity price caps in California, a position which was immensely profitable to Enron. Vice President Cheney has refused to provide the records of the energy task force to Congress, in defiance of specific requests from the General Accounting Office.

"We call upon George W. Bush to acknowledge the massive conflicts of interest within his administration, and to go outside his administration to appoint a truly independent Special Prosecutor who will fully investigate the crimes committed by Enron, and the possible involvement of top officials of the Bush administration in those crimes," Fertik said.

In an effort to persuade Mr. Bush to appoint a special prosecutor, Democrats.com has launched a new Web site at ttp://democrats.com/enron, which includes a petition to Mr. Bush. Democrats.com will also launch an Internet advertising campaign to collect signatures on its petition.

"The Enron collapse was the largest corporate bankruptcy in American history, and tens of thousands of Americans suffered financial harm. The public must learn the truth about Enron, including the role played by George W. Bush and his administration. As in the Whitewater investigation, a Special Prosecutor may ultimately conclude that Mr. Bush committed no crimes. But without a Special Prosecutor, Americans will never know the full truth," Lytel concluded.