Better Late Than Never: Administration Should Have Fired Army Secretary Thomas White Long Ago

April 28, 2003

Better Late Than Never: Administration Should Have Fired Army Secretary Thomas White Long Ago

 

Statement by Joan Claybrook, President of Public Citizen

 

WASHINGTON, D.C. – The April 25th resignation of Thomas White, a former Enron executive, from his position as Army Secretary comes far too late and for the wrong reasons. The Bush administration has been content to let the Army be run for too long by White, a poster boy for corporate abuse.

From 1998 to March 2001, White headed Enron Energy Services (EES), a division of Enron that bought and sold retail energy contracts largely in California. Under White’s direction, EES’ business ballooned, growing from the 61st largest U.S. energy trading company in 1998 to the 28th largest by the time White left in March 2001, when President Bush named him Army Secretary. EES enjoyed a dominant role in the California energy market, selling power to clients as diverse as 7-Eleven, McDonald’s, SBC Communications, IBM and the state’s public university systems.

At the height of the energy crisis, EES dropped all of its California clients, forcing taxpayers to pay for the clients’ power needs (by then, the state had assumed most of the utilities’ responsibilities for purchasing expensive power in the deregulated wholesale market). In his July 2002 sworn testimony before the Senate, White denied any knowledge of EES’s price-gouging, and even claimed that EES was never involved in energy trading.

However, Public Citizen’s 2002 analysis of the company’s activities during the energy crisis (click here to view), showed that White withheld what he knew from the committee or was not truthful with the committee. Public Citizen’s research revealed that EES was a significant energy trader from 1998 to 2001. Further, the company’s business actually increased after EES severed contracts with California clients, indicating that the company was selling the power formerly allotted to those retail clients in the more expensive wholesale market.

If White directed these unethical activities, he never should have been rewarded with his top post as Army secretary. If he was unaware of them, as he claims, it only demonstrates his ineffectual managerial skills, and he never should have been rewarded with his top post as Army secretary.

While Public Citizen applauds White’s resignation, we lament this administration’s ethical laxity in appointing him to the job and allowing him to keep it for so long.

###

Note: for an updated analysis of Enron’s influence in the federal government, based on records since March 2002, click here.