GOP image at risk in Enron saga

As probes of White House dealings with firm grow, the perception of cozy ties to business may hurt Bush most. coziness with business, biggest risk may be with voters. For Bush, a big one is that more voters will see him - and his party - as too closely aligned with big business.

The facts of the Enron case as revealed so far may not be the biggest danger to the White House. Nor is it the investigative drumbeat of eight congressional committees and the Justice Department pursuing the case.

Rather, analysts say, what most threatens the president is revelations about just how close-knit the ties were between the Bush team and Enron executives - the kind of detail that fuels perceptions of the Republican Party as an exclusive club for big money.

George W. Bush, who has tried to temper that one-dimensional image of his party via his "compassionate conservative" slogan, knows the damage this stereotype can do - especially in an election year, and especially when a recession is pinching "the little guy."

"During the weak economy, the worst thing to have is the perception that you cater to the well-heeled," says Marshall Wittmann, a political analyst at the conservative Hudson Institute here. "There may very well be no misdeeds at all, but I don't think that's the vulnerability. The vulnerability is the administration's cozy corporatism."

That tight relationship is underscored by developments in the Enron case so far. Last week the administration announced that Kenneth Lay, Enron's chairman, called Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans, a long-time friend, for help last fall before his firm collapsed in America's biggest bankruptcy ever. Enron's president also made several calls to the assistant Treasury secretary, seeking help with bank loans. In all instances, according to the administration, the Cabinet officials declined to offer aid.

President Bush says he never discussed Enron's financial difficulties with Mr. Lay, a Texas friend and the president's biggest individual financial contributor. The administration has been adamant that it gave no favors in return for all Enron's financial backing.

That support runs as deep as a Texas oil well. The Enron chief has donated about $650,000 to Mr. Bush over the course of his political career. In the 2000 election, the Houston-based company, including Lay, doled out $2.4 million in donations - about three-quarters of that to Republican candidates. Attorney General John Ashcroft has recused himself from the Justice Department's criminal investigation, because Enron executives donated more than $50,000 to his failed bid for a US Senate seat.

The administration has recently acknowledged that Bush's task force on energy met six times with Enron officials as it formulated its energy plan last year. Vice President Dick Cheney, who, like the president, is a former Texas oil executive, headed the task force. The Government Accounting Office is waiting for Mr. Cheney to hand over details of meetings with Enron and other industry officials.

Democrats so far haven't jumped on the Enron episode with undisguised relish, but they are nonetheless using it to try to reinforce the image of a president beholden to big business.

"Enron now becomes shorthand for Democrats trying to convey to the American people the irresponsible way that the Bush administration ... puts special interests above those of the average American," says Jennifer Palmieri, Democratic National Committee spokeswoman.

Echoing Rep. Henry Waxman of California, the senior Democrat on the House Committee on Government Reform, she wonders why Bush administration officials, once aware of Enron's financial distress, "didn't do anything" to prevent the loss of retirement savings of thousands of the firm's employees.

Bush, for his part, has not exactly kept his ties to business under wraps. Rather, at times he flaunted them as a sign of broad-based backing. During the presidential campaign, for instance, he boasted he didn't need federal dollars for his bid, because he could rely on supporters in the private sector. Indeed, the campaign turned out to be the best-funded in American history, with money arriving in $100,000 increments.

Still, some voters found these fundraising methods distasteful. And once Bush was in office, his ties to the corporate world at times made him vulnerable to charges of putting business interests ahead of the public interest. Such charges dogged him, for instance, when the administration set policy on arsenic levels in drinking water, greenhouse gases, energy, and tax cuts.

Interestingly, Bush's role as wartime commander-in-chief is what has helped him more than any "compassionate conservative" slogan. Whether it was visiting with firefighters or sticking up for Islam, he has succeeded - for the first time in decades - in changing the image of the Republican Party, says a GOP pollster who asked not to be named.

"When you pose the question, 'Are Republicans too close to big business and the wealthy,' we've always had about two-thirds of Americans agree with that statement. That has now moved to tied," said the pollster, whose findings have not yet been made public.

The Bush administration does not want to lose that headway. The president may have told year-end interviewers that he made no mistakes last year, but the White House is obviously doing some corrective work. Last week, Bush announced a significant increase in the budget to clean up abandoned, polluted industrial sites. Earlier, the White House said it was extending food stamps to immigrants. In its coming budget, it reportedly plans to distance itself from corporate tax cuts by merely mentioning "principles" for an economic-stimulus package.

White House spokesman Ari Fleischer disputes the theory that the Enron case will reinforce unwelcome stereotypes of the president and his party. He points out that Bush is leading the investigation, directing a review of policies to protect people's pensions, and focusing on the criminal investigation of Enron's alleged wrongdoing. "Politics and perceptions - the president is pleased to leave those to other people here in Washington," Mr. Fleischer says.

Others in the White House warn against the Democrats' overplaying their hand. "If the American people were sick and tired of political investigations of Bill Clinton, what makes anybody think the American people will react well to politically inspired investigations of the commander-in-chief at a time of war, particularly one where there's not even an inkling of wrongdoing?" one administration official says.

Still, just because the administration does not appear to have been involved in any quid pro quo, political observers here say it still has work to do. Two months elapsed between the time Enron leaders spoke with Cabinet officials and when the White House revealed those conversations. Analysts say the administration needs to be more forthcoming about other contacts, and some even advise Bush to get out in front of the big-money issue and support a ban on unlimited "soft money" campaign contributions in his State of the Union message.

There seems to be no thought of the latter, but as to full disclosure, Mr. Fleischer says, "We will cooperate with everyone who is not involved in fishing expeditions."