The White House has acknowledged that Vice President Dick Cheney discussed in June a controversial Enron power plant project in India with that nation’s opposition party leader.
Presidential spokesman Ari Fleischer said Friday that Cheney inquired about the Dabhol power plant near Bombay, which is supported with $460 million in U.S. government loans and $180 million in insurance.
“The vice president called and expressed, what he did was ask about the status of the project,” Fleischer said. “It is an important project to create jobs in America, and there’s also a taxpayer exposure.”
The Dabhol project was launched in 1994, and Fleischer said the U.S. “exposure” includes a $300 million loan from the U.S. Export-Import Bank, a second loan from the U.S. Overseas Private Investment Corp. and $180 million in OPIC insurance.
The project had enthusiastic support from then-President Bill Clinton and his staff and additional financial backing from other international lending institutions.
From the start, though, the power plant was controversial in India, where it was burdened by a bribery scandal and was the object of public ridicule. The plant, 65 percent of which is owned by Enron Corp., is complete but it has not gone into operation. It is for sale at a sharply discounted price.
That Cheney discussed the project in a June 27 talk with Sonia Gandhi, head of India’s opposition Congress Party, was first revealed Friday by the New York Daily News, which obtained e-mails concerning the project under the Freedom of Information Act.
News of the Cheney-Gandhi chat represents the latest admission by the White House that administration officials had been discussing Enron’s business and were in contact with Enron executives, particularly in the weeks leading up to the once-powerful energy company’s filing for bankruptcy.
Shareholders have charged that Houston-based Enron used little-known partnerships to keep nearly $600 million in trading losses and $1 billion in debt off its books. Thousands of employees and stockholders lost billions when Enron failed.
Enron Chairman Kenneth Lay is an avid political supporter of President Bush. Enron employed several people who now work in the administration.
One former Enron employee, economic policy adviser Lawrence Lindsey, was advised by the White House counsel against taking part in a discussion of the Dabhol project, Fleischer said. Before coming to the White House, Lindsey received a $50,000 consulting fee from Enron in 2000.
In another development Friday, messages between Lay and Enron employees on Sept. 26 show Lay was still urging employees to buy Enron stock and assuring them the company’s finances were sound.
“The third quarter is looking great,” Lay messaged an Enron worker that day, three weeks before the company announced heavy quarterly losses.
Lay’s message was part of an electronic meeting with employees on an internal Enron network. The company posted a transcript of the Sept. 26 employee e-mail session and it surfaced in a class-action lawsuit by Enron employees suing over their financial losses.
The White House has said Lay did not specifically ask for a government bailout of Enron, though he talked to administration officials before the company filed for bankruptcy in December.
