White House warned over Enron files

Some former employees have lost their life savings

The US Justice Department has ordered the White House not to destroy any documents relevant to collapsed energy trading company Enron.

The order covers all letter, files and emails relating to Enron, whose 2 December bankruptcy was the biggest in US history.

At this time we are only requesting that you ensure the retention of these records

Justice Department letter

The Justice Department's ruling will be welcomed by the Democrats, who believe the Enron scandal could damage the Bush administration.

President George W Bush received more than $600,000 in campaign contributions from the company, and other members of his government also had close ties to Enron and its former chairman, Kenneth Lay.

A letter from the Justice Department to the White House said: "We believe that documents in the possession of the White House, its staff and employees may contain information relevant to our investigation."

The White House said it would comply with the ruling, which at this stage only calls for documents to be kept, not handed over.

Document shredded

The Justice Department and the FBI are conducting a criminal investigation into Enron, whose allegedly illegal accounting practises left thousands of employees and shareholders nursing huge losses.

Democrats say the president could be damaged by the scandal

Investigators believe executives at Enron and at its auditor Arthur Anderson shredded important documents before the company's collapse.

Mr Bush has tried to distance his administration from the fall-out, and from suggestions Enron was able to buy influence.

"Enron made contributions to a lot of people around Washington DC, and if they came to this administration looking for help they didn't find any," he said.

Attorney General John Ashcroft has distanced himself from the criminal investigation because he received campaign contributions from Enron during an unsuccessful Senate bid.

Vice President Dick Cheney is also under fire after it emerged that he or his staff met six times with Enron executives while the Bush administration was deciding its energy policy.

Mr Cheney has refused a request from Congress' investigative arm, the General Accounting Office, to release documents relating to the meetings.

On Friday, a federal judge ordered Mr Cheney's team to explain the constitutional argument behind its refusal.

Congress hearings

The Justice Department's order came as Congress prepared for hearings into Enron's collapse.

A spokesman for the House Energy and Commerce Committee said Andrew Fastow, Enron's former chief financial officer, and Michael Kopper, an Enron executive, had indicated they would refuse to answer questions at a hearing scheduled to take place on Thursday.

Both men were expected to assert their Fifth Amendment right against potentially incriminating themselves.

David Duncan, the lead Enron auditor from Arthur Andersen, invoked his Fifth Amendment right at a hearing last week and refused to answer questions.

Mr Lay is due to testify on Monday.