10 January 2002

White House Report: Mideast, South Asia, Enron

BUSH CALLS EGYPT'S PRESIDENT TO DISCUSS MIDEAST, TERRORISM

President Bush early January 10 phoned Egypt's President Hosni Mubarak to discuss the situation in the Middle East and the campaign against terrorism, White House Press Secretary Ari Fleischer told reporters.

Bush told Mubarak that he will continue General Anthony Zinni's mission to help the Palestinians and the Israelis "achieve a cease-fire and to implement the Tenet-Mitchell agreement," the press secretary said.

Bush "also, however, registered his deep concern about the arms shipment intercepted last week" in the Red Sea, Fleischer said.

Both Bush and Mubarak, Fleischer said, "agreed to continue their efforts to help bring peace to the Middle East" and "they also pledged to cooperate closely to eradicate terrorism."

Bush "expressed his appreciation for Egypt's help in this regard. And the leaders noted their satisfaction that the U.S. will speed up economic assistance the Egypt in order to help Egypt address its economic situation," the press secretary said.

BUSH DROPS IN ON RICE MEETING WITH INDIA'S HOME MINISTER

President Bush "did a drop-by" into the January 10 meeting at the White House between National Security Advisor Condoleezza Rice and India's Home Minister Lal Krishna Advani, Fleischer said.

"The drop-by was designed to underscore the United States' commitment to strong bilateral relations with India and to work together to combat terrorism in all its manifestations," he said.

President Bush "again expressed his outrage" over the recent terrorist attacks in New Delhi and Srinagar, Fleischer said. Bush told Advani that he has urged Pakistan's President Pervez Musharraf to take appropriate steps against extremists operating in and from Pakistan, Fleischer said.

Bush "also stressed the importance of solving the India-Pakistan differences through diplomatic and political means."

Fleischer added that Bush "is appreciative of the steps that have been taken by President Musharraf. President Musharraf has taken some positive steps. He has condemned the terrorist attacks; he has arrested the leaders of the Jaish-e- Mohammed and the Lashkar-e-Toiba organization; he's closed their offices. The President believes there's room for additional work to be done, and President Musharraf is moving forward. And the President reminds all in the region that the war there is against terrorism and not a war between India and Pakistan," the press secretary said.

DEPARTMENTS OF JUSTICE AND LABOR INVESTIGATING ENRON CASE

Fleischer said that the executive branch of the U.S. government is proceeding on two tracks in its investigation into Enron, the U.S. corporation that filed the largest corporate bankruptcy in U.S. history on December 2.

"One is the investigative track, dealing directly with Enron, and on that front, the Department of Justice yesterday announced a criminal investigation of Enron to determine whether or not there is criminal wrongdoing," Fleischer said.

The Department of Labor, Fleischer said, "is also reviewing and investigating Enron to see what took place with the workers' pensions at Enron, to see if anything can be done. More broadly than that, the President thinks it is just crucial to focus on how to prevent this from ever happening again. There are major policy implications that have to be explored," the press secretary said.

President Bush, Fleischer told reporters, has directed the federal government "to take a look at, one, how to protect people's pensions as a result of the way pension rules are written for people's benefits within the corporations, as well as taking a look at the accounting practices, procedures that are underway so people have accurate financial information."

According to news reports, when Enron declared bankruptcy, company employees lost their pension benefits, and investors lost billions when the stock price collapsed, while, some executives of the company made money by selling stock before the bankruptcy was announced.

Fleischer said Enron Chairman Kenneth Lay called Commerce Secretary Don Evans and Treasury Secretary Paul O'Neill last fall about the company's problems, but the two Cabinet Secretaries "agreed that no action should be taken."

Fleischer emphasized that the first Bush learned of those conversations was today (January 10).

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