Time to go

Former Enron executive Thomas E. White has three strikes against him and should call himself out as secretary of the Army. Otherwise, the Army cannot be all it can be.

Strike One. By staying in frequent touch with his former colleagues at Enron Corp. after he became Army secretary on May 31, 2001, White failed to avoid the appearance of conflict of interest, even if there was no actual conflict. The law of the land is unforgiving here, and past presidents have been too, accepting resignations of two earlier service secretaries who appeared to be maintaining their business interests after taking office.

White was vice chairman of Enron Energy Services from 1998 to 2001. In that job, he sought to persuade the Defense Department to use private utilities rather than on-base generating plants to supply its power needs. As Army secretary, White continued to push for such privatization, a policy that could have benefited Enron if the firm had stayed in business.

Seemingly sensitive to the need to keep a firebreak between his old Enron interests and his new responsibilities as Army secretary, White said this of himself and his fellow service secretaries at his confirmation hearing before the Senate Armed Services Committee on May 10:

"We are obligated to follow both the letter and the spirit of the law in terms of potential conflicts [of interest]. I fully intend to do that. Second, I am coming from an energy company, Enron Corp., which has a very slight relationship with the Department of the Army and a very small one with the Defense Department. And I will personally commit to you to avoid any even appearance of conflict in terms of any future relationships that Enron may choose to have with the department or attempt to have with the department."

But thanks largely to digging by that nemesis of tobacco executives Rep. Henry A. Waxman, D-Calif., it has since come to light that White met with or telephoned his former colleagues at Enron more than 70 times after becoming Army secretary. Waxman is particularly interested in finding out if those communications enabled White to sell his Enron stock at a good price before the company went bankrupt. Waxman also wants to know if White--who earned $5.5 million a year as an Enron executive--gave his former industry colleagues any inside information about government investigations of Enron during those communications.

White vigorously took on those questions in a meeting with reporters last week, declaring: "In those phone calls, whether there are 50 or 500 of them, no one ever asked me to do anything for Enron nor did I in any way. There was never any exchange of what I would call insider information, nonpublic information, or anything that gave me any advantage whatsoever in the divestiture of my stock. This did not happen, period."

White confirmed that he was interested in privatizing the Army's creaking utilities--gas, electricity, and water--while he was at Enron and still is as Army secretary, because it is "the right thing to do." But as Army secretary, "I have never taken any action" in regard to Enron's contract to privatize utilities at Fort Hamilton, N.Y., "or any other interaction" between the Army and Enron "in the pursuit of this privatization business.... The Secretary of the Army does not get into contracting decisions of any type on installations or even within commands. I have never ever gotten into the business of who wins what contract or what the particulars of it are in any way, shape, or form. OK?"

White said that he gave an incomplete list of his contacts with Enron to Waxman in his first letter to the congressman because he had not combed through his telephone records thoroughly. "I should have qualified the response more. I think that's a valid criticism."

White may well be telling it like it was. But his continued communication with Enron after becoming Army secretary gives at least the appearance of conflict of interest--something he vowed to avoid. The Supreme Court has said that such appearances, in the eyes of citizens, can shred a democracy. These excerpts from the Court's 1961 ruling on the celebrated Dixon v. Yates conflict-of-interest case provide an insight into White's appearance problem:

"The moral principle upon which the [conflict of interest] statute is based has its foundation in the Biblical admonition that no man may serve two masters (Matt. 6:24), a maxim which is especially pertinent if one of the masters happens to be economic self interest.... It is also significant, we think, that the statute does not specify as elements of the crime that there be actual corruption or that there be any actual loss suffered by the government as a result of the defendant's conflict of interest.... The statute is thus directed not only at dishonor, but also at conduct that tempts dishonor.... The statute is more concerned with what might have happened in a given situation than with what actually happened....

"The statute is preventive in nature; it lays down an absolute standard of conduct.... The statute is directed at an evil which endangers the very fabric of a democratic society, for a democracy is effective only if the people have faith in those who govern, and that faith is bound to be shattered when high officials and their appointees engage in activities which arouse suspicions of malfeasance and corruption."

Republican President Eisenhower was confronted in 1955 with making a decision about then-Air Force Secretary Harold E. Talbott, who had continued to pursue business interests after taking office, including writing letters on official stationery. Democratic President Kennedy was faced with the same kind of dilemma in 1963 in regard to Navy Secretary Fred Korth, who wrote letters on official stationery to drum up business for the bank he came from. Both secretaries proclaimed their innocence and said they had broken no laws. The Justice Department chose not to prosecute them. Both resigned after their apparent conflicts of interest came to light.

Strike Two. White has gotten crosswise with both the Democratic chairman and the ranking Republican of the Senate Armed Services Committee. This takes some real doing. The committee is practically an arm of the Pentagon. It has launched many members of its staff into high Pentagon jobs, including John J. Hamre, deputy Defense secretary during the Clinton Administration; current Air Force Secretary James Roche; and Les Brownlee, White's undersecretary in the Army Department. An Army secretary who offends this committee shoots his service in the foot. The committee has a lot to say about how much money and how many soldiers the Army gets.

"We do not believe your actions satisfied the requirements of this committee," Chairman Carl Levin, D-Mich., and Sen. John W. Warner, R-Va., wrote to White on March 1. They charged that White had violated his ethics pledge by holding onto Enron stock and by accepting an annuity from the company. White had signed an agreement with the Office of Government Ethics to divest himself of stock in Enron and other defense-related corporations within 90 days of assuming office on May 31, 2001. Instead, he got extensions on this pledge to divest, prompting Levin and Warner to declare that he had given the committee "an inaccurate representation" of the situation.

Strike Three. Rightly or wrongly, fairly or unfairly, the Enron debacle has cost White credibility as a businessman and as a leader. He is politically wounded at a time the Army needs a civilian leader at full strength. The Army's problems right now are monumental--ranging from doubts about its very mission and the crippling loss of its best and brightest junior officers, to a looming disaster in its reserves and National Guard that stems from the pressures of too many overseas deployments.

Get away from the Pentagon briefings and their glowing accounts of what the Army has done in Afghanistan, and you hear and read negative remarks such as these made by several Army people themselves: "How come it was the Marine Corps, not my Army, that was the first to invade a landlocked nation?"... "Where's [Army Chief of Staff Eric K.] Shinseki? He's the most remote chief we've ever had." ... "What's all this transformation bullshit?" ... "There's not going to be any reserve component in two years, the way things are going. They're making Special Ops a Foreign Legion. Even the reserve groups are getting deployed because we're so short. They won't keep taking it."

White no doubt knows all this and more. He is, after all, a retired Army brigadier general. When he became Army secretary, he seemed to have a sense of mission about attacking these and other problems while trying to pull the service into the 21st century.

Officers who had served in the Pentagon when Togo West was Army secretary under President Clinton cheered when White took office. West's refusal to stand up for the Army when the going got tough earned him the nickname "No Go." An example still being talked about was when West, an African-American, stayed in his bunker during the sexual-harassment crisis at Aberdeen, Md., when the Army was accused of discrimination for prosecuting black drill sergeants charged with sexually abusing female trainees. The Army can be accused of many things, but racism is not one of them. In fact, it is the most successful equal-opportunity employer in the world and one of the few American institutions where large numbers of blacks routinely boss large numbers of whites. But Army information officers could not get West to say any of this at the crucial time.

White, who to be effective as secretary needs to think about the Army's future rather than about his Enron past, is increasingly being forced to look backward, not forward. Investigators in the Pentagon, the Justice Department, and Congress all have questions for him. They want him to explain how he made millions on his Enron stock while lower-paid employees lost money; why he stayed involved with Enron after becoming secretary; and whether he used government planes for personal travel. White acknowledges that such questions are legitimate. And he believes he has legitimate answers to them.

To his credit, White has promised to resign as Army secretary if these Enron investigations keep him from fully carrying out his Army duties. They will. He is another Enron casualty. Time for him to let somebody who isn't politically wounded take the point for the Army.