Analysis

Once a Friend and Ally, Now a Distant Memory

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By Zachary A. Goldfarb
Special to The Washington Post
Friday, May 26, 2006

He started as "Kenny Boy." Then he was a "supporter," an acquaintance who had not talked to President Bush in "quite some time." Now he is a man convicted of conspiracy and fraud, and a symbol of corporate corruption.

This is former Enron chief Kenneth L. Lay's transformation in the words of President Bush and his spokesmen -- going from a personal and political ally to someone the White House sought to keep as distant as possible as his role in the multibillion-dollar collapse of the energy giant became clear.

In the 1980s, when Bush was working in the Texas oil industry, his firm invested in a drilling partnership with Lay's company, a predecessor to Enron. In 1992, Lay was co-chairman of the Republican National Convention in Houston that re-nominated President George H.W. Bush.

Later, Lay was a major fundraiser for George W. Bush's political career. He delivered more than $300,000 for his two gubernatorial campaigns, according to Texans for Public Justice. In 1997, Bush wrote to Lay: "Dear Ken, One of the sad things about old friends is that they seem to be getting older -- just like you! 55 years old. Wow. . . . Laura and I value our friendship with you. . . . Your younger friend, George W. Bush."

In the 2000 presidential race, Lay remained a steadfast ally. Lay was a Bush "Pioneer" who raised at least $100,000, according to the Center for Responsive Politics. Enron also made its jet available and contributed to inaugural festivities.

Lay later wrote to the new president and the first lady that he was "so proud of you and look forward to seeing both of you in the White House." But Lay also found influence in the administration.

Vice President Cheney invited Lay to take part in his secret energy task force meetings. Cheney also talked to the Indian government about a debt it owed Enron for the rebuilding of a power plant. Numerous administration officials held Enron stock. Lawrence B. Lindsey, Bush's chief economic adviser at the time, had sat on Enron's board, receiving $50,000.

These connections came to light as Enron collapsed under the weight of a broad accounting fraud. It was also revealed that Enron executives had sought the counsel of administration officials as bankruptcy loomed.

Responding to public outrage, the White House promoted corporate accountability and put space between itself and Enron. Bush said only that "Ken Lay is a supporter," and that he "first got to know Ken" in 1994 when "he was a supporter of Ann Richards," the Democratic governor Bush ousted. Dan Bartlett, the White House communications director, said the administration "is leading the investigation, not being resistant."

White House press secretary Tony Snow congratulated the Justice Department yesterday on winning the case, adding: "The administration's been pretty clear there's no tolerance for corporate corruption."


© 2006 The Washington Post Company

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