Former Enron Chief Pleads
Not Guilty to Criminal Charges
Former Enron Corp. chief executive Kenneth L. Lay surrendered to federal agents at daybreak Thursday in Houston, pleading not guilty to criminal charges that he knew his company was failing in 2001 when he sold millions of dollars in stock and urged investors and employees to buy more.
The government accuses Lay of standing at the top of a scheme to mask more than $7 billion in losses and increasingly severe debt problems at Enron in the latter half of 2001, leading to a financial disaster that became the signature scandal of the 1990s stock market bubble.
The former executive, 62, was led in handcuffs to the federal courthouse in Houston and was released on $500,000 bond after entering his plea.
The 11 charges against Lay of conspiracy, fraud and making false statements mark the pinnacle of an investigation into Enron's collapse -- an inquiry that has ensnared 31 people, including Wall Street bankers, myriad Enron underlings and the now-defunct accounting firm Arthur Andersen LLP.
-- Carrie Johnson
Dissident Chinese Physician
Forced Into Indoctrination
Chinese military and security officials are forcing the physician who exposed the government's coverup of the SARS epidemic to attend intense indoctrination classes and are interrogating him about a letter he wrote in February denouncing the 1989 Tiananmen Square massacre, sources familiar with the situation say.
The officials have detained Jiang Yanyong, 72, a semi-retired surgeon in the People's Liberation Army, in a room under 24-hour supervision, and they have threatened to keep him until he "changes his thinking" and "raises his level of understanding" about the Tiananmen crackdown, said one of the sources, who described the classes as "brainwashing sessions."
But Jiang has refused to back down.
China's state-controlled media have not reported Jiang's detention, which began June 1. In response to questions submitted by The Washington Post, the government said in a brief statement: "Jiang Yanyong, as a soldier, recently violated the relevant discipline of the military. Based on relevant regulations, the military has been helping and educating him."
-- Philip P. Pan
Security Intensified in Areas
Near Political Convention Sites
Convinced that terrorists are determined to disrupt the presidential election by attacking the United States, the government is mounting a massive homeland security effort as the run-up to the two presidential nominating conventions begins.
Unprecedented security arrangements have been made for the conventions in Boston and New York, where authorities believe al Qaeda may see an opportunity to disrupt and perhaps alter the outcome of the Nov. 2 election. But the planning extends to "symbolic events" such as Labor Day weekend, when crowds will gather, and to Election Day.
The effort stems from intelligence officials' conclusion that al Qaeda and like-minded groups, buoyed by the Madrid train bombings on March 11 and the electoral defeat of Spain's government days later, are determined to launch something similar in this country. They base their conclusion on what they call incontrovertible classified intelligence that apparently includes electronic surveillance.
-- John Mintz
Drug Firms Violate Law by Not
Disclosing Trials, FDA Says
The pharmaceutical industry has repeatedly violated federal law by failing to disclose the existence of large numbers of its clinical trials to a government database, according to the Food and Drug Administration.
Doctors and patients say compliance with the law would go a long way toward addressing their growing concerns that they are not being given the full picture about the effectiveness of many drugs because they are not told about drug trials that fail.
The issue has gained urgency with recent disclosures that the publicly available research on treating children with antidepressants obscured the fact that in most studies, the drugs were no better than sugar pills. Drugmakers chose not to publish those studies.
The FDA acknowledges it has not enforced the law -- officials said the statute did not spell out penalties or explicitly give the agency authority to crack down on violators.
FDA officials said they are reexamining whether they have the power to step in.
-- Shankar Vedantam
Cheney's Internist Was Covered
Under Privacy Agreement
The D.C. agency that takes disciplinary action against doctors was unaware for five years that Vice President Cheney's personal internist was under treatment for an alleged addiction to prescription drugs because of a confidentiality agreement the agency maintains with a physicians group, officials involved said Monday.
Until informed by a reporter last week, the District's Board of Medicine, which investigates allegations of physician wrongdoing, did not know that George Washington University Medical Center had referred Gary Malakoff, the director of its internal medicine division, for treatment in 1999.
The licensing board was not notified by the Medical Society of the District of Columbia, the physicians professional group that for years oversaw Malakoff's unsuccessful treatment while he continued to treat patients. The two organizations maintain an agreement, hammered out in recent years, that emphasizes the privacy rights of impaired doctors while they are being treated as patients.
Under the terms of that agreement, the society will not tell the board that a local physician has a drug, alcohol or other problem as long as that physician stays in counseling for five years, undergoes scheduled drug tests if appropriate and agrees to stop seeing patients if those terms are broken.
Over the past four years, Malakoff has repeatedly attested to the excellent health enjoyed by the vice president, a survivor of four heart attacks, and continued to be part of his medical team.
He was placed on leave in May when the Medical Society informed GWU that Malakoff's treatment was failing and that he should no longer see patients, said Alan Wasserman, chief of the medical center's department of medicine and Malakoff's immediate supervisor.
-- Rick Weiss
Archdiocese of Portland, Ore.,
Is First to File for Bankruptcy
The Roman Catholic archdiocese of Portland, Ore., became the first in the nation to file for bankruptcy protection Tuesday under the weight of sexual abuse lawsuits that have cost it more than $53 million in claims.
The Chapter 11 filing in U.S. Bankruptcy Court for the District of Oregon stopped two civil trials scheduled to begin Tuesday, in which alleged victims of the Rev. Maurice Grammond, a deceased priest, were seeking about $160 million in damages. About 60 additional claims involving Grammond and other Portland area priests are pending, lawyers said.
Lawyers for alleged victims across the country said they were stunned by the filing, which will temporarily protect the archdiocese from creditors while it works out a financial reorganization plan. Some worried that it might be a turning point in the scandal that has rocked the church for 21/2 years.
-- Alan Cooperman