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Enron has friends in high places; no help likely

The near collapse of US Energy trading giant Enron Corporation comes at a time when it has never had more political friends in high places -- or is perhaps further away from help.

The company and its chief executive Kenneth Lay have long been heavy contributors to powerful Republicans, including President George W Bush, and have lines of communication to the White House and Congress.

But, say senior Republicans, its financial wounds are so deep and heavily self-inflicted that it is likely to get little more than sympathy from its well-connected friends.

Enron stock, which rose to $90 dollar a share last year, fell to 61 cents Wednesday after rival Dynegy Inc pulled out of a last-chance $9 billion merger, saying Enron had not lived up to the deal they struck on November 9.

Enron said it was exploring its options and in the meantime would quit paying most of its bills. Most analysts believe it will soon file for bankruptcy protection.

The stunning fall from grace follows a long period in which Enron and Lay built up political contacts that made it the envy of the corporate world.

Political experts estimate Lay has given $1 million to Bush's political campaigns over the years. Last year, the Bush election campaign accorded Lay the title of 'Bush pioneer' for raising at least $100,000 for Bush's run for the presidency.

When Bush was governor of Texas, Lay served on his Governor's Business Council, which helped push the Bush legislative agenda, and he was a key energy adviser during the presidential campaign.

As the Bush Administration formed its controversial energy plan, which stressed increased domestic energy production favoured by the oil and gas industry, Lay was one of several business executives called in to consult with Vice President Dick Cheney.

''Ken's been a friend,'' Cheney explained to PBS' News programme ''Frontline.''

According to the Center for Responsive Politics, which tracks money in politics, Enron and its employees gave $2.4 million in contributions in the 2000 election year, the most of all energy companies.

The Washington-based center said 72 per cent of the money went to the Republicans.

According to federal election commission documents, Enron and Lay each gave $25,000 US Attorney General John Ashcroft last year when he ran unsuccessfully for re-election to the US Senate from Missouri.

The company also has close ties with US Senator Phil Gramm of Texas, a Republican on the powerful Senate Banking Committee.

Gramm's wife, Wendy, joined Enron's board of directors after a five-year term as chairwoman of the US Commodity Futures Trading Commission, which played a role in deregulating energy markets that Enron dominated until its financial crisis.

Bush's father was US President during her time as head of the commission.

But despite its friends in high places, Enron may get little help from Republican lawmakers who say its problems are its own doing and beyond the reach of the government.

''We can't simply step into every bad market decision and every bad financing decision that occurs in American corporations in this country and work it for them,'' said US House Energy and Commerce Committee chairman Billy Tauzin, a Republican from Louisiana.

''It's a sad story. It's been a hugely successful enterprise,'' he added.

The only aid for Enron may come in an economic stimulus bill, pending before Congress, that would give tax rebates to corporations.

According to the Citizens for Tax Justice, a tax policies research and advocacy group, Enron would get $254 million under the current version of the bill.

Enron said in a recent government filing it has more than $16 billion in debt and other obligations.

WHITE HOUSE SAYS US TREASURY MONITORING ENRON

The US Treasury department is monitoring the potential market impact of Enron Corp's financial difficulties, the White House said.

''That is monitored by the treasury department in terms of any effect it may have on markets or any other areas. They are keeping an eye on that,'' White House spokesman Ari Fleischer told reporters Wednesday.

Enron, an energy firm, was on the brink of one of the biggest collapses in corporate history Wednesday after its rescue by rival Dynegy Inc fell apart.

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