U.S. Cabinet Suspected of Falsehood . . . the Enron Scandal Spreads

Washington is currently nervous about the Enron scandal, and `falsehood suspicion` of administrative figures is creating another scandal.

The latest issue of Newsweek magazine reported that there is a question of suspicion of falsehood in what Commerce Secretary Donald L. Evans and Treasury Secretary Paul H. O`Neill said about the calls they had with Enron Chairman Kenneth L. Lay before the company`s bankruptcy.

Until now, the White House authorities insisted that President George W. Bush and Vice President Dick Cheney had no contact with Enron on the basis that they never received Enron-related reports from the two secretaries. Newsweek disclosed that this is false.

Evans and O`Neill appeared on a TV show on the 13th, and explained that they were on the phone with Enron twice, but they did not report this to Bush.

Especially newsworthy is the newly publicized fact that Evans made an additional call aside from the two calls mentioned. According to Newsweek, while he was in Moscow, Russia, regarding commercial matters on October 15 last year, he called Lay himself and discussed Enron`s power plant being built in India.

During the call, Lay told him that there was a conflict with the Indian government concerning the power plant price, and Evans advised consulting with a veteran Republican PR man Sig Rogich, a Bush family friend, who was in India that time.

The conversation has become a topic of scandal because its timing. On the following day, Enron announced its 618 million dollar-loss in the second half of the year.

Evans and Lay are insisting that nothing about Enron`s financial crisis was mentioned during the telephone call, but Newsweek emphasizes their old friendship and questions whether they truly did not mention money problems while discussing the power plant in India.

Sung-Kyu Kim kimsk@donga.com