February 8, 2002
The Honorable Jeb Bush
Office of the Governor
Tallahassee, Florida 32399-0001
Dear Governor Bush:
Florida’s pension fund – for which you chair the oversight board – lost $334 million on Enron stocks and bonds in the wake of the company’s collapse. Many of the pension fund’s investments were made as Enron’s stock was plummeting in value and financial problems at the company were being publicly revealed. Investigations into the fund’s losses are now being conducted by the Florida attorney general, the Florida State Board of Administration and a committee appointed by the state House of Representatives.
Because of the conflicts of interest resulting from your strong ties to Enron and your extensive entanglements with the company, we call for you to recuse yourself from making any decisions or taking any actions relating to these investigations, and from taking an active role in any lawsuits against Enron, Arthur Andersen or other entities related to the Enron collapse. We also call on you to refrain from taking any actions on behalf of the Board of Administration that relate to Enron.
Your longstanding relationship with the company and its executives requires that you step down from any potential involvement in bringing Enron to justice. It is a state and national imperative that any wrongdoing be fully and independently investigated and that these investigations avoid even the appearance of conflict of interest.
We make our request because:
- You have been a business partner with Enron. In 1995, you invested nearly $92,000 in an Enron affiliate, Enron Liquids Pipeline, and sold your interest 10 months later for a $7,100 profit;
- You appointed Walter Revell to be chairman of the Florida 2020 Energy Study Commission, which was established to develop energy strategies for the state. Mr. Revell is a 25-year friend of Ken Lay. The policies set forth by the commission could have greatly benefited Enron;
- In 1999, Enron subsidiary Azurix proposed a scheme under which it would help pay for Everglades restoration in exchange for water rights. Approximately two weeks after Enron’s plan was proposed, you appointed James Garner III, an Azurix lobbyist, to the Governor’s Commission for the Everglades;
- Enron has been a generous contributor to your campaign and to Florida Republicans. Enron, its subsidiaries and its employees contributed $420,000 to Florida political campaigns between 1995 and 2001, more than 80 percent of that going to Republicans, according to the St. Petersburg Times. And the Florida Republican Party received at least $76,500 from Enron towards your election in 1998, state records show;
- According to Florida Department of State records, you accepted nearly $20,000 from Enron, its subsidiaries, and the company’s accounting and law firms, during your 1998 campaign, including $6,500 directly from Enron executives;
- Ken Lay reportedly gave money to the Foundation for Florida’s Future, a think tank you founded (the foundation refuses to reveal its funders or the amount of their gifts);
- The Board of Administration’s deputy executive director is Coleman Stipanovich, brother of J.M. "Mac" Stipanovich, a Republican political consultant and lobbyist who ran your gubernatorial campaign in 1994;
- In January of this year, Richard Kinder, former Enron president and large donor to your brother, George W. Bush, and the Republican Party, held a fundraising event for you at his Houston home, which you attended;
- Enron and its employees contributed $312,500 to your brother’s 1994 and 1998 Texas gubernatorial campaigns, and another $113,800 to his presidential campaign. Enron also gave $10,500 to the Bush-Cheney Recount Fund and $300,000 to the Bush-Cheney 2001 Inaugural Fund, according to the Center for Responsive Politics.
Other prominent officials have recused themselves from involvement in any investigation or litigation involving the company. U.S. Attorney General John Ashcroft did so, as did John Cornyn, attorney general for Texas. Three federal judges have recused themselves, as has the entire U.S. Attorney’s office in Houston.
In light of the fact that other public officials have acknowledged their conflicts and reacted accordingly, we believe that you owe the people of Florida a complete explanation of the extent of your ties with Enron. We ask you to:
- Disclose all contacts you have had with Enron executives or agents since you have been governor and explain the nature of those contacts;
- Tell the public when you knew Enron was in financial trouble, particularly whether you had knowledge of Enron’s shaky financial condition as the state pension fund was buying shares that were rapidly declining in value;
- Explain what safeguards you put in place, or attempted to put in place when you became governor to ensure that such dramatic pension fund losses would not happen; and,
- Tell Floridians what measures you plan to enact to ensure that such losses do not occur again.
We look forward to your making this information available to the public.