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Saturday, 12 January, 2002, 09:48 GMT
US appoints Enron inquiry chief
Enron staff pose for photographs
Enron's accounts gave an unclear picture of its health
The US Justice Department has named the head of its fraud section, Joshua Hochberg, as acting attorney overseeing the criminal investigation into the failed energy giant Enron.

Enron - the seventh largest American company - filed for bankruptcy last year in a case that has prompted questions about its links to President George W Bush's administration.

The president's focus is on getting to the bottom of this fully

White House spokesman Ari Fleischer
Mr Hochberg's appointment came a day after US Attorney General John Ashcroft said he could not lead the investigation into Enron's fall - like Mr Bush he had received election contributions from the company's executives.

On Friday, the treasury department revealed that one of its officials had received numerous calls to intervene on behalf of Enron.

The White House has denied any wrongdoing.


Along with Mr Hochberg, the US Justice Department announced that Leslie Caldwell - a San Francisco crime prosecutor - was to head a national task force investigating the company.

And a Senate committee has issued 51 subpoenas to company officials as it investigates the case.

Enron chairman Kenneth Lay
Enron chairman Kenneth Lay is close to President Bush
The inquiry centres on whether investors and employees were misled about the company's financial strength and whether Enron's contributions to the Bush campaign assured it preferential treatment by the US administration.

A department of treasury spokeswoman said Enron's president Lawrence Whalley had spoken to the department's Under Secretary for Domestic Finance Peter Fisher about six or eight times in late October and early November.

"As Enron's negotiations with its bankers for an extension of credit neared a decision point, the president of Enron asked Under Secretary Fisher to call the banks," spokeswoman Michele Davis said.

"Under Secretary Fisher inferred he was being asked to encourage the banks to extend credit. He made no such calls," she added.

The treasury department also disclosed that former Treasury Secretary Robert Rubin also telephoned them on Enron's behalf.

Political aftermath

President Bush's spokesman Ari Fleischer said the president's focus was on "getting to the bottom of this fully" through a criminal investigation and a thorough policy review.

He warned the president's opponents against trying to make political capital out of the case.

Enron has filed for chapter 11 bankruptcy - which allows a company to continue trading while seeking protection from its creditors.

The firm has already confessed to having inflated its profits.

Its collapse is the biggest corporate failure in US history, and it leaves debts behind of about $15bn.

The BBC's Rob Watson
"This is more than a story of corporate greed and corruption"
See also:

10 Jan 02 | Business
Enron documents 'disposed of'
10 Jan 02 | Business
Enron collapse prompts inquiry
12 Dec 01 | Business
Enron to start $6bn sell-off
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