[Congressional Record Volume 148, Number 96 (Tuesday, July 16, 2002)]
[House]
[Pages H4677-H4678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  PRESIDENT BUSH NEEDS TO CLEAN HOUSE

  Mr. DeFAZIO. Mr. Speaker, when President Bush came into office at his 
first Cabinet meeting, he said, I expect only one standard and that is 
the highest of ethical standards. I think many Americans breathed a 
sigh of relief with the idea that we were going to have an 
administration free of the drip, drip, drip of scandal of the past 
administration.
  Unfortunately, not too long into the President's tenure, that began 
to become a bit unraveled, and yet the President has yet to ask for the 
resignation of any of the ethically challenged members of his 
administration.
  One standout is Secretary White of the Army. Secretary White was a 
general retired, and then went to Enron for his retirement. We all know 
Enron. Previous to MCI WorldCom, the largest scandal and bankruptcy of 
financial mismanagement and phony bookkeeping in the history of the 
United States. He headed the worst of Enron, Enron Energy Services. Not 
only was Enron Energy Services a total fraud, they never made a penny. 
In fact, they lost billions of dollars while showing huge profits on 
the books with phony trades. They created things called Death Star, Get 
Shorty, Fat Boy and other cute names, sounds like maybe secret weapon 
systems, maybe the kind of thing Secretary White should know about, but 
he says he did not know a thing about all this phoniness, he was just 
the front guy, just the rainmaker, just bringing in business and 
walking away with $60 million.
  He also manipulated the West Coast energy market, destroying the 
economy of the Western United States. Oregon is in a deep recession in 
part because of a 40 percent unnecessary runup in our electric rates 
because of the shenanigans of Enron and other market manipulators.
  Mr. White, who ran the part of Enron which did the market 
manipulation, says he did not know anything about that either, but he 
has compiled quite a stellar record since he has gone to be Secretary 
of the Army. He took a corporate jet to Aspen to sign papers to sell 
his $6.5 million ski house which he bought with his ill-gotten gains 
from Enron. He forgot to meet the ethics requirements to get rid of his 
stock with Enron, some stock options he had, and yet the President has 
not called for his resignation.
  Now we have a new task force. So Americans should rest easy. We have 
a new task force, which is headed by a gentleman called Larry D. 
Thompson, Deputy Attorney General. President Bush sat between Mr. 
Harvey Pitt, who I have talked about on the floor before, the ethically 
challenged head of the Securities and Exchange Commission who cannot 
vote because he is so compromised because of his past association with 
all of the people he is supposed to be investigating. It is a good deal 
for them because then he cannot convict them of anything and cannot 
fine them.
  Then on the other side of the President was Mr. Thompson. He is the 
new head of the so-called SWAT team which turns out instead to be a 
kind of a task force, low-key thing. We would not want to get too tough 
on corporate fraud.
  Mr. Thompson has quite a bit of experience. He was on the board of 
Providian. Providian paid the largest penalties in the history of the 
United States. He was on the audit committee, on the board of 
directors, paid a pretty penny for this work, but Providian, during his 
tenure while he was on the audit committee and the board of directors, 
committed quite a bit of fraud and mismanagement and paid the largest 
ever penalties to the Comptroller of the Currency of the United States, 
$105 million of penalties for fraud, mismanagement, and consumer abuse; 
not trivial.
  They have also settled a $38 million class action lawsuit, and there 
are other class action lawsuits pending. They are also being sued by 
their employees who said that Mr. Thompson and other members of the 
board of directors and executives at Providian told them to put more 
stock in their 401(k)s while they were secretly dumping their own 
stock. This is our new chief corporate watchdog of the so-called SWAT 
team.
  To return to Mr. Pitt, Mr. Pitt, head of the Securities and Exchange 
Commission, who the President also has expressed utmost confidence in, 
cannot vote on many enforcement actions of his agency because he, in 
fact, was not the lawyer for but the lobbyist for, and sometimes the 
lawyer of, many of these same firms who today it is being shown have 
caused this horrible scandal in the United States. Arthur Andersen was 
one of his prominent clients. MCI WorldCom was another of his clients 
and many others.
  If the President really wants to put some meaning behind this 
statement, and I am all for it, and that is, the one standard and the 
highest of ethical

[[Page H4678]]

standards, he needs to start to clean house. He needs to get rid of 
some of these extraordinarily, ethically challenged members of his 
administration who profited by tens of millions or hundreds of millions 
of dollars while Americans saw their pensions and their investments go 
down the drain.
  Start in the administration.

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