Florida's Pension Fund
Biggest Enron Casualty -
Connection Probed


TALLAHASSEE, Fla. (UPI) - A series of investigations is underway to determine how Florida's pension fund became the biggest loser in the failure of Enron Corp., viewed as the most spectacular financial collapse in the nation's history.
The state lost $325 million in investments with the firm. Newspaper investigations produced the disclosure that last spring, Gov. Jeb Bush, President Bush's younger brother, held a half-hour telephone conversation with Kenneth Lay, who was then Enron's CEO.
The office of Democratic Attorney General Bob Butterworth has been conducting an investigation into the scandal, and a state House of Representatives committee was set to begin its own hearings Thursday evening.
Bush had responded to efforts for a meeting by Enron's Tallahassee lobbyist, Bill Bryant, with an e-mail that said: "I'd love to meet with Ken."
Bush and Lay never met in person but talked on the telephone, mostly about energy deregulation as it relates to Florida. The governor has not mentioned deregulation in public since.
Documents released this week under freedom of information statutes give no indication their relationship was close.
"Enron was the seventh-largest corporation in the nation. They requested a meeting with the governor. They got a phone call," said Katie Baur, a spokeswoman for Bush. "Nothing came of the phone call. There's no story here."
A number of news reports showed that Enron, its subsidiaries and employees contributed about $420,000 to Florida political campaigns from 1995 to 2001.
An analysis by the St. Petersburg Times showed that more than 80 percent of that went to Republicans, including $10,500 directly to Bush. Some of the contributions to Democrats included Sens. Bob Graham and Bill Nelson, D-Fla.
Democrats in Florida want to focus on Alliance Capital Management Corp., which was contracted by Florida's pension fund. They said the company continued to invest in Enron even after there were reports it was in trouble.
Alliance bought 2.2 million Enron shares after Oct. 22 when it was announced the Securities and Exchange Commission was investigating Enron.
Alliance sold all of the 7.6 million shares it had bought Nov. 30, two days before Enron declared bankruptcy.
Democrats point out that one of Alliance's executives, Frank Savage, was a board member of Enron. Alliance says Savage was not instrumental in the purchase of the shares.
The loss was only one-third of 1 percent of the state's $94 billion pension fund, and officials say no employees or pensioners will be shortchanged.
Copyright © 2002 United Press International. All rights reserved.

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