Thomas White used to be proud of his résumé. When he was appointed secretary of the army last May, his online bio boasted about his 11 years as a senior exec at Enron. Then that nest of thieves collapsed, and suddenly it wasn’t so cool to have been a big shot there. It was time to apply some serious splotches of white-out to White’s life. Swiftly, quietly, the official biography for the army’s top dog was changed, but cybersleuths soon unearthed the original.
No longer posted for the broader public on the army’s Web site, the document could serve as a kind of primer for the senators who’ll soon hear White’s testimony about the energy trader’s downfall. The record begins by explaining White’s new responsibilities. It then quickly jumps into a two-paragraph recap of his Enron glory days:
Prior to his appointment as Secretary of the Army, Secretary White served as Vice Chairman of Enron Energy Services, the Enron Corporation subsidiary responsible for providing energy outsource solutions to commercial and industrial customers throughout the United States. Mr. White was responsible for the delivery component of energy management services, which included commodity management; purchasing, maintaining and operating energy assets; developing and implementing energy information services; capital management; and facilities management.
Secretary White also served as a member of Enron’s Executive Committee and was Chairman and Chief Executive Officer for Enron Operations Corporation. He was also responsible for the Enron Engineering and Construction Company, which managed an extensive construction portfolio with domestic and international projects.
Sometime after Enron tanked, that glowing report went the way of a California city in an Enron-sponsored blackout. Visitors to the army’s site are no longer regaled with details of White’s corporate prowess. Instead, they read this: “From 1990 to 2001, Mr. White was employed by Enron Corporation and held various senior executive positions.”
The Enron material has not only been shrunk to tiny proportions, but it has also been shoved down to the very last sentence, where it sits as nothing more than a lonely afterthought.
Reached for comment, Charles Krohn, the deputy chief of public affairs for the army (and former next-door neighbor of White), said, “I don’t know what the company answer is. But I think it’s the obvious one. After what happened with Enron, his experience doesn’t seem relevant. But it would be disingenuous, if not dishonest, to take out all Enron references.”
Besides the general taint of being associated with a company that screwed its employees, stockholders, and consumers while executives stuffed their pockets with cash, White has many specific reasons to downplay his role.
As a bigwig with Enron, he set up deals to supply the army with electricity. As head of the army, he immediately spoke of the need to further privatize the army’s utilities. Enron must’ve been salivating.
Further, White failed to divest himself of all Enron holdings as quickly as he told the Senate he would during his confirmation hearings. In March, the Senate Armed Services Committee strongly rebuked him for it: “Based on the information we have received from you… and from the Office of Government Ethics, we do not believe that your actions satisfied the requirements of this committee.”
White finally got around to selling his stock at the end of last October, five months into his tenure as head of the army. Funny thing is, during that same month, he documented talking to his old buds at Enron — either on the phone or face-to-face — 13 times. October 2001, you may recall, is the month that Enron started to go belly up. Naturally, White denies they talked about the company’s impending doom before he dumped his stock.
Not everyone is buying his story, though. Both the FBI and the Securities and Exchange Commission are investigating his contacts with his former cronies.
But it gets even better.
In early May, the world got to see an internal memo in which Enron’s lawyers revealed ways to manipulate the California energy market and jack up prices — creating phony congestion, skirting price caps, etc. The media had a field day reporting on the plans, known by names like “Death Star,” “Get Shorty,” and “Ricochet.” What they didn’t mention was that the corporate division where White was “responsible” had been directly involved in these maneuverings. Enron Energy Services was, in fact, the only division specifically named in the smoking-gun memo. What’s more, the skullduggery was happening while White was in the hands-on position of vice chairman.
Research by the Nader-affiliated Public Citizen shows that during the first three months of 2001, Enron Energy Services traded millions of megawatts of electricity with other divisions of Enron, artificially jacking up the prices to as much as $2500 per megawatt hour (compared to the average price of $340 at the time). “As vice chairman,” the nonprofit watchdog notes, “White was in charge of running day-to-day operations, including managing and signing retail energy contracts.” The results for California were rolling blackouts and sky-high prices. The results for White were much better. “As a direct result of his division’s fraud, White is a multimillionaire,” says Public Citizen.
Now White has been called to testify before the Senate about Enron’s shenanigans in California. He agreed to appear and has said that Enron Energy Services didn’t engage in manipulation. But the mere specter of him sitting before lawmakers provides a solid sign that the Enron scandal is reaching high into the Bush administration.
We shouldn’t forget that White has problems not relating to Enron. There was that little jaunt he took last spring on a government plane to sell some of his real estate in Colorado. And he fought hard for the Crusader, which pissed off Defense Secretary Donald Rumsfeld, who had decided that the mobile artillery system had to go. During a recent press conference, Rumsfeld trotted out White to shamefacedly say he supports the decision to can the Crusader. The Daily Enron, a Web journal, later noted, “One reporter there said he looked like a POW being forced to read a confession while tapping out an SOS with his eyelids.”
Is White on his way out? Official army flacks deny it, but that’s certainly the scuttlebutt. Time magazine reports that after the press conference, “folks close to White began hinting that the Army Secretary might leave in a few weeks.” USA Today quotes senior Pentagon officials saying that the army man “is likely to be forced out of his post.”
If so, White’s official bio will have to be changed again — his brief tenure as head of the army could easily be shrunk to a single sentence.