USA: VP Tried to Aid Enron in India

Vice President Cheney tried to help Enron collect a $64 million debt from a giant energy project in India, government documents obtained by the Daily News show.

"Good news is that the veep mentioned Enron in his meeting with [Indian opposition leader] Sonia Gandhi yesterday," a National Security Council aide wrote in a June 28 e-mail.

Two other e-mails indicate that President Bush was to bring the subject up with Indian Prime Minister Atal Bihari Vajpayee, but the idea was scrapped before they met.

The documents are the latest indication that there were contacts between the Bush administration and Enron on issues directly related to the company's business. The White House maintains Enron enjoyed no special favors from the White House or Cheney.

Treasury Secretary Paul O'Neill and Commerce Secretary Donald Evans have conceded that they spoke with Enron chief Kenneth Lay last fall about the energy giant's impending failure, but they insist they refused to help.

The new documents, obtained under the Freedom of Information Act, indicate Cheney took a key role in pushing the Maharashtra State Electricity Board to make good on the huge debt claimed by Enron for a power plant it built in Dabhol, India.

Cheney spokeswoman Mary Matalin denied yesterday that Enron officials prodded Cheney to raise the issue with Gandhi, widow of slain Prime Minister Rajiv Gandhi and daughter-in-law of assassinated Prime Minister Indira Gandhi.

"This is not our issue," Matalin said. "It was in the briefing papers, so he asked the question. The vice president didn't remember that topic at all. I asked him directly."

White House and other top officials were interested in the Dabhol project partly because the taxpayer-backed Overseas Private Investment Corp. provided insurance against losses resulting from political problems in India. Overseas could face exposure as high as $300 million.

The $3 billion Dabhol project was started in 1992 and built amid political wrangling in India that included allegations of bribery. The plant eventually was completed, but it has never been used. It involved at least 40 international finance institutions, including Overseas, and Enron's partners included General Electric and the Bechtel Corp.

The e-mails indicate the State and Treasury departments also were deeply involved in making Enron's case.

The highest-level contact they verify was Cheney's June 27 meeting with Gandhi, president of the opposition Congress Party.

Other e-mails indicate Lay was expected in Washington around that time, but they do not say whether he was in contact with Cheney's office.

Lay -- whom Bush used to call "Kenny Boy" -- has given more than $600,000 to support Bush's political career.

Matalin said Lay and Cheney never discussed the Indian debt or Enron's financial condition.

The documents obtained by The News showed that the National Security Council had given the Overseas Private Investment Corp. high hopes that Bush would raise the issue with Vajpayee in a Nov. 9 meeting.

The investment corporation had sent the White House "talking points on Dabhol prepared for the President's meeting with Prime Minister Vajpayee," according to a Nov. 1 e-mail.

But a Nov. 8 e-mail, whose sender and recipient are blacked out, warned, "President Bush cannot talk about Dabhol."

White House economic adviser Lawrence Lindsey, who was previously paid $50,000 a year as an Enron adviser, also "was advised that he could not discuss Dabhol."

National security adviser Condoleezza Rice, however, was still expected to raise the issue -- but did not, another e-mail says.

• 106 Money & Politics
• 107 Energy
• 185 Corruption