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Bush refuses to appoint special Enron prosecutor

President George W Bush on Tuesday brushed off an appeal by a key senator to appoint a special prosecutor to lead an investigation into the collapse of Enron, saying his Justice Department could handle it.

Senate Commerce Committee Chairman Ernest Hollings, a South Carolina Democrat, broke the overall bipartisan tone of the Enron investigations on Monday with a call for the appointment of a special counsel in light of Bush administration links to Enron Corp.

Answering questions from reporters as he toured a medical lab, Bush gave no indication that he would call for a special counsel, an investigator outside the normal Justice Department channels similar to the special prosecutors who were a staple of the scandals of the presidency of Bill Clinton.

"This is a business problem. And my Justice Department is going to investigate, and if there's wrongdoing, we'll hold them accountable for mistreatment of employees and shareholders," Bush said.

Asked whether he did not see a need for a special counsel, Bush said: "I see a need for laws. I see a need for a full investigation, and that's what we're providing."

Bush called on Congress to approve his pension reforms to try to avoid a repeat of what happened in the Enron bankruptcy when thousands of employees saw their retirement accounts wiped out by the company's collapse.

In its investigation, the Justice Department has told the White House to preserve all its records in case they might be needed later.

The Justice Department said on Monday appointment of a special counsel was not warranted and the Republican National Committee denounced Hollings' comments as "blatant partisanship."

Houston-based Enron was a generous political donor to both parties, although it tilted its money toward Republicans and was especially generous to Bush's 2000 presidential campaign.

Hollings said he had no confidence in the Justice Department. He cited Attorney General John Ashcroft's decision to recuse himself from the case because of Enron campaign contributions.

"We've got an Enron government," Hollings told a news conference.

On Capitol Hill, Senate Majority leader Tom Daschle, a South Dakota Democrat, said while there are questions about how the Justice Department could handle the probe, he saw no need for a special prosecutor, at least not yet.

"I think there are a lot of skeptics, but we're watching with great interest and attention," Daschle told reporters. "And at least as we go forward, we're going to give them the benefit of the doubt."

The White House noted Enron had made campaign donations to both political parties. Bush has denied helping Enron as it fell apart last year.

"It was very disappointing because this is a time when Democrats and Republicans need to work together to treat this as a serious issue, as a criminal investigation of wrongdoing, and to act together to protect pensions," said White House spokesman Ari Fleischer.

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