Ministers say Enron links 'entirely proper'

Enron executives met senior British figures

Senior government ministers have fended off allegations of corruption over Labour's relationship with collapsed US energy giant Enron.

Party chairman Charles Clarke, echoed by Deputy Prime Minister John Prescott, told the BBC there was nothing improper in the government's relationship with the company.

And Downing Street denied any impropriety in a series of meetings over a number of years between several ministers and Enron executives.

Enron's multi-billion-dollar bankruptcy was the biggest corporate collapse in US history and is now the focus of several investigations, including a criminal one.

Clarke: no impropriety

Among the high profile people linked to the company have been Prince Charles and BBC chairman Gavyn Davies, who have both said their contacts with the firm were entirely above board.

Last week former Conservative energy minister Lord Wakeham stepped down temporarily as chairman of the Press Complaints Commission to answer questions about his involvement with the firm, which he joined as a non-executive director in 1994.

Separately, the Tories have accused the government of taking "cash for access", after it emerged Labour had accepted gifts totalling £36,000 from Enron.

Although the allegations were undermined when it emerged that the Conservative Party had itself received £25,000 from the company, the government is anxious not to be tainted by sleaze allegations.

On Sunday, Mr Clarke told BBC1's Breakfast with Frost: "Do I believe that there was any impropriety or any issues that will arise out of this? I certainly do not.

'No evidence'

"It is something that will be debated, but I think the whole process was entirely proper."

Downing Street last week issued a list of seven meetings between Enron representatives and ministers Peter Mandelson, Stephen Byers, John Battle and Helen Liddell.

As further meetings came to light on Sunday, a Downing Street spokesman said the list available covered only trade and industry ministers.

He added: "There is nothing extraordinary or improper in government officials and ministers meeting representatives of industry, especially those creating jobs in this country. That was the case with Enron."

At no time did I own Enron shares or represent Enron's interests

Gavyn Davies
BBC chairman

Mr Prescott dismissed the allegations and suggested they were made in a forlorn hope that mud would stick.

Speaking on BBC1's On the Record, he said: "You mention Enron as if you have got an accusation to make against us.

"I presume you haven't, because no evidence has been provided.

"There is no evidence to suggest any kind of corruption."

Mr Davies was a merchant banker and informal adviser to the Labour leadership before becoming BBC chairman.

Prince meetings

He said he became an external adviser to Enron in 1999 for two years, and refused a £35,000 pay offer.

Mr Davies said: "The advice given was entirely consistent with my position as chief economist at Goldman Sachs and was similar to that which I routinely gave to dozens of other entities, without accepting direct payment.

"I was never involved in discussions about Enron's financial strategy and, like many other outsiders, was amazed when news broke of the financial difficulties of the company and possible irregularities in its accounting.

Davies waived payment

"At no time did I own Enron shares or represent Enron's interests. I simply gave them external advice on global macro-economic issues."

Earlier on Sunday, St James's Palace confirmed that Prince Charles met Enron chief executive Kenneth Lay and former Enron Europe chairman John Wing after the company gave £800,000 to his Prince's Trust charity.

But the prince's spokesman said this was entirely normal practice for charity sponsors.

Meanwhile, it has been reported that Lord Wakeham, a non-executive director of Enron and the head of Tony Blair's commission on House of Lords reform, may face ruin after being named in a multi-billion pound lawsuit launched by former employees of the failed company.