15 Apr 02. The Wall Street Journal reports that U.S. Army Secretary Thomas E. White is the subject of a federal investigation into possible insider trading in the sale of shares of Enron Corp. last year, lawyers close to the case said.
Federal Bureau of Investigation agents are interviewing Mr. White’s friends and former colleagues regarding whether he sought or acted on inside information from them on the company’s precarious financial condition in scores of calls he placed last fall, as he sold off his stock.
Investigators appear to be focused most closely on calls and contacts Mr. White had in October, when he sold off $3.08 million in stock—or half of his holdings—as the company’s condition worsened.
Mr. White has said that he did indeed discuss Enron’s deepening problems in many of the calls, but that he did so out of concern about his friends at the company, and that he didn’t possess or act on any inside corporate information. “I never sold any stock based on what anyone told me at Enron,” Mr. White told reporters on March 27.
Senior Justice officials have said they would pursue the Enron case wherever it goes and had earlier asked the Pentagon to preserve any documents or records related to the case, including Mr. White’s phone records. The disclosures of the timing of his stock sales and his contacts with Enron officials couldn’t be ignored by investigators looking into every aspect of the Enron case; the continuing controversy has brought calls for Mr. White’s resignation and an unwelcome spotlight on the Bush administration’s close ties to Enron.
It may be difficult for the FBI to make a case. Several of those interviewed said they told agents the calls were largely personal and didn’t involve inside information. Mr. White has said specifically that he had no knowledge of the off-the-books partnerships that were used to inflate Enron’s profit, conceal debt and enrich a handful of company executives; these partnerships are now the subject of a federal criminal investigation.