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• Army confirms anthrax from Texas
• Enron under-reports lobbying
• Enron tries to Control Markets
• Republicans try to stop Probe
• FERC may probe Enron--California
• Bank Execs Forced Out--Enron
• Budget Reality--Bush Agenda
• GAO Will Sue White House
• Jeb Bush's Daughter Busted
• Curtains Cover Justice Dept. Statues
Army confirms Texas origin of anthrax terror strain
chron.com/AP

anthraxWASHINGTON -- To Dr. Michael L. Vickers, a dead cow lying in a remote pasture of a South Texas ranch in 1981 was no different from the hundreds of other felled cattle he had seen.

Vickers, who has a private veterinary practice in nearby Falfurrias, sliced out tissue from the animal -- the liver, the spleen and other organs -- put them into a plastic ice chest and sent them by bus to a laboratory in College Station, home of Texas A&M University.

He was sure the animal had died of anthrax -- the blackberry color of the spleen was the main clue -- but he sought confirmation from the Texas Veterinary Medical Diagnostic Laboratory.

"It was just another anthrax," recalls Vickers. "In the field, anthrax is just anthrax. We see it just about every year."

Vickers had no idea that 21 years later bacteria perhaps descended from those specimens he collected would be at the center of a bioterrorism attack that would kill five people, infect a dozen more and force the evacuation and sterilization of buildings in Florida, New York and Washington.

Back in 1981, workers at the College Station lab received Vickers' package and cultured specimens from the organs of the dead cow. They quickly confirmed that the specimens were loaded with bacteria with the characteristic bamboo-jointed rods of anthrax.

Dr. Konrad Eugster, chief of the diagnostic lab in 1981, remembered that the Army had earlier requested a fresh sample of anthrax. He said two vials filled with the anthrax cultures were packaged in ice and shipped to Fort Detrick, Md., headquarters of the Army's biological warfare research center.

Eugster said the box bore a prepaid label with the return address of the National Veterinary Services Laboratory in Ames, Iowa, an Agriculture Department facility.

According to The Washington Post and The New York Times, the specimens from Texas A&M were among 27 anthrax strains that were collected at Fort Detrick. Since the box bore an Ames, Iowa, return address, researchers called the anthrax strain "Ames."

Five years later, two researchers at Fort Detrick published a science paper in which they reported the Ames strain was highly lethal when tested on laboratory animals. They also said the anthrax strain came from Iowa, continuing the mistake prompted by the mailing label.

It was a mistake that would matter little until last fall, when investigators determined that the spores used in the anthrax-by-mail attacks in Florida, New York and Washington were all the Ames strain.

This prompted investigators and the news media to start asking questions in Ames, Iowa. Officials at Iowa State's College of Veterinary Medicine, which had a collection of anthrax cultures, dug through old files, but found no documentation that any of their cultures were the Ames strain, according to the Times.

The true origin of the killer strain -- that dead cow 21 years ago in Texas -- was confirmed in old Army documents, according to the Washington Post.

Vickers said he was not surprised that the spores used in the deadly anthrax attacks came from Texas.

"We have a really virulent strain," he said. "I have seen 30 head (of cattle) die in just 24 hours."

Vickers said that natural anthrax, present as spores in the mesquite and grassy prairies of south and central Texas, routinely kills scores of deer annually. Most ranchers inoculate their cattle, but some strays still get sick nearly every year, he said. Vickers recommends that ranchers avoid sick and dying cattle because the bacteria is dangerous to humans.

"I tell ranchers to pile on mesquite logs and burn the animal on the spot," said Vickers. To protect himself, the vet says he disposes of instruments, equipment and even clothes that have come into contact with contaminated specimens.

And as a final precaution, Vickers said he takes a full course of antibiotics after dealing with an animal that has been killed by anthrax.

"I've never had anthrax," he said, "but I am very cautious."


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Enron tries to Control Markets
chron.com

As accountants, stockbrokers and others study Enron's collapse, they focus on the company's now-infamous "special-purpose vehicles" -- independent companies that propped up Enron's income and hid its debt.

They want to know whether the vehicles' goosing of Enron's financial statements was a side effect or their sole purpose.

One good clue is the list.

In the last year at Enron Global Finance group, managers were sometimes handed a list of Enron assets and instructed to go out and sell some to the vehicles, said an employee with direct knowledge of the procedure.

"Knowing what I do now, I know that was used directly to manipulate the (stock) market," the employee said.

A manager would pick something, from a plant to stock to a piece of a start-up company. Then he would walk the deal through a team of internal lawyers and auditors.

The bigger the "sale," the bigger his bonus.

What actually happened was that a bank or other investor lent money to the newly created company to finance the purchase. The new company, in turn, paid the money to Enron.

Why didn't Enron just get a loan itself without going through a middleman? Because the loan now belonged to the new company, not Enron, and thus didn't count as a debt on Enron's financial statement.

Instead, it counted as income to Enron when the new company passed on the proceeds.

Less debt and more income do wonders for a quarterly report. The procedure assured Enron would keep its high credit rating, saving big bucks, and would keep the stock price up.

After a while, the employee said, employees joked that there would be no assets left to deal.

"Every associate on up knew. We used to joke about, `I want this thing to stand up until I get my money and go,' " he said.

Two former Enron employees who worked on the special-purpose vehicles spoke at length to the Chronicle about what they did for a living. One met with a reporter in the offices of a Rice University accounting professor.

The employees, graduates of top schools, spoke on the condition that they not be identified.

Both said there were many uses for the vehicles that they considered legitimate, such as bringing in outside partners to share the risks of a particular venture. But there was little question, especially toward the end in the finance group, that many had no real "business purpose" other than improving financial appearances.

"They are created merely to make the income statement look better. An average person would say there's something wrong," said Michael Granof, a University of Texas accounting professor.

The employee with direct knowledge of the process didn't disagree. It's just sort of what they did, he said, and he never realized the extent of the company's debt.

The anatomy of the deal was simple, he said.

Say the asset was 100 shares of IBM stock. Enron would divide each share into two parts, one called a "control interest" and one called an "economic interest." Then it would sell the economic interest to a newly created special-purpose vehicle.

The asset was rarely as simple as 100 shares of another company's stock. So Enron had to put a value on it. Because there wasn't really an outside buyer, it decided the price itself and had that number blessed by its auditor, Arthur Andersen.

The deal was placed with a bank, insurance company or other major lender, which put up 97 percent of the money. Sometimes the promise of Enron stock would be put up to guarantee the loan, as a sort of collateral, although Enron stockholders were never told of the risk that their shares could be diluted if such new shares had to be issued, the employee said.

To qualify as "independent" from Enron for accounting purposes, an SPV had to be owned by someone else. So an outside entity would be brought in to make the required investment, which was just 3 percent of the SPV's total start-up cash.

In some cases, Enron is alleged to have lent that money to the outside equity partners, though the employee said he had no direct knowledge of that.

Enron no longer owned the economic interest in the asset, but it did own control over it. In the sales contract with the vehicle, Enron promised always to act in the interest of the SPV. Lawyers and auditors said all this was OK.

As the asset made money for the SPV -- if it did, and many didn't -- it made principal and interest payments to the lender and issued dividends to the outside equity partners, just like in a normal company.

So what was left for Enron? Unlike a normal company, the yield to the equity partners was capped. If the partner's yield cap was 15 percent and the asset made 20 percent, Enron got 5 percent.

Most important, Enron got to report the proceeds of the sale of the asset as earnings. It had to repay the loan, of course, but the debt didn't show up on Enron's financial statements.

A basic question is why Enron didn't just sell the assets normally to raise money. The answer is control, the employee said. If the asset were a plant, perhaps Enron would give itself the operating and maintenance contract. If it were private shares of another company, maybe Enron was technically forbidden to sell, or it could make another deal later.

By keeping its visible debt low, Enron retained a higher credit rating and thus paid a lower interest rate on money it borrowed and money borrowed by the SPVs, the employee said.

When Enron was forced to restate its earnings last year to include some of that debt, and as debt from other sources also surfaced, Moody's Investor Services downgraded Enron's bond rating. With a trading company such as Enron, where the ability to borrow vast sums at favorable interest rates is key, that was fatal. Bankruptcy quickly followed.

Such accounting practices were a factor in the company's fall, but the real problem was that many of Enron's recent major investments -- broadband and water divisions, New Power and an Indian power plant -- did not work out, said the employee and Rice University accounting professor Bala Dharan, who also questioned the employee.

"Investors don't like to hear you say, `Oh, I was wrong.' So you start having a yard sale to boost CFO (cash flow from operations) and net income," the employee said.

The second employee said many SPVs were easier to justify. Sometimes they were created to bring two other parties together, with Enron merely providing the expertise. Both said investors were happy to get involved in the deals.

But in recent years, the first employee said, their use became more questionable.

"Is any of that illegal? No, but it's shady. The investor couldn't truly know what Enron owned or what Enron owed. People don't pay attention to the footnotes," he said.

And the footnotes in Enron's required financial statements also weren't much help. Granof, an author of accounting textbooks with an MBA and doctorate, said he found them "unintelligible."

"That was conscious. No two ways about it," the employee responded.

Granof said he still couldn't quite understand why SPVs are considered legitimate. While expressing disappointment with Andersen for "deceiving" investors while meeting the letter of the law, he said, "there but for the grace of God go four other major accounting firms" of the Big Five that could have been similarly ensnared in the Enron fiasco.

"Something is wrong with the rules," he said.


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Enron under-reports lobbying expenses
chon.com/AP

WASHINGTON -- Enron Corp. acknowledged tonight that it may have failed to disclose to Congress about half the money the energy company spent on lobbying, which totals more than $1.6 million for the first part of last year.

The discrepancy came to light when a nonprofit group, the Center for Responsive Politics, cross-checked Enron's report to Congress with those filed by outside lobbying firms representing the company.

A dozen premier lobbying firms with Washington offices were hired by Enron and reported spending more than $1.6 million for the first six months of last year. Enron reported it spent about half that -- $825,000.

Enron spokeswoman Karen Denne said the company's figure is meant to include both lobbying by the company's governmental affairs staff and work by outside lobbying firms.

"We are reviewing those fees and will respond in writing to the secretary of the Senate," said Denne.

Among the lobbyists doing work for Enron last year were Republican strategist Ed Gillespie, ex-Democratic Louisiana Sen. J. Bennett Johnston, Republican Party head Marc Racicot and former aides to House Minority Whip Tom DeLay. Racicot still collects a salary from his firm, but said when he took the GOP post he wouldn't lobby for Enron anymore. In the face of mounting criticism, Racicot has since given up his other lobbying clients as well.

Larry Noble, the executive director of the nonprofit group that uncovered the discrepancy, said "it is particularly critical at this time for the public to have the full picture of Enron's lobbying activities."

In another development, Enron said it hired private companies to shred documents, but an attorney said the documents were not sensitive financial records.

FBI agents have been investigating allegations of massive shredding of documents at Enron's Houston headquarters. The company's auditor, Arthur Andersen LLP, has acknowledged destroying Enron-related documents and e-mails that were sought by federal and congressional investigators.

Enron hired two companies, one of them named Shredco, to destroy a huge volume of documents, ABC News reported Tuesday night, quoting unidentified Enron lawyers.

Robert Bennett, Enron's Washington attorney, called the ABC report "a bunch of nonsense."

"There was a contract with a company when Enron consolidated down from two buildings to one building," Bennett said. "There was a lot of information including payroll records, resumes, Social Security numbers. These trucks came in in the light of day."

Bennett insisted there was no improper shredding.

"We should wait for the investigation of the FBI," Bennett said.

Rep. Jim Greenwood, R-Pa., whose House Energy and Commerce investigative subcommittee has been examining the Enron affair, said that regardless of what kind of documents were destroyed, "it's outrageous that a company that's the focus of investigations ... wouldn't understand that this is no time to be shredding documents."

"Even if they're shredding old newspapers, they need to contact the Justice Department" to get permission to do so and allay suspicions, Greenwood said in an interview.

The Justice Department is pursuing a criminal investigation of Enron and Andersen. The Securities and Exchange Commission has been investigating since Oct. 31. Eleven congressional panels also have opened inquiries.

A report that Enron's political action committee filed Tuesday with the Federal Election Commission shows the PAC donated at least $26,000 to congressional campaigns in November, the month before the company filed for bankruptcy protection. Recipients included several lawmakers on the committees now investigating Enron's collapse. At least two of them, Rep. Mary Bono, R-Calif., and Rep. Greg Walden, R-Ore., plan to give their donations to charity.

In all, the Enron PAC donated at least $120,188 to federal candidates and fund-raising committees last year, the report shows.

The report covers only "hard money" contributions -- donations that can be given in limited amounts but spent by recipients as they choose -- by the PAC, which is funded by employee contributions. It does not include "soft money" donations by the company itself to the Republican and Democratic national fund-raising committees, including the parties' House and Senate committees.


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Republicans weigh stopping GAO suit against White House
chon.com/ap

WASHINGTON - Republicans say they may take action to stop congressional investigators from suing Vice President Dick Cheney to get information on business executives who met with him and his aides on energy policy.

"I think it may come to that," said Sen. Orrin Hatch, R-Utah, the top Republican on the Senate Judiciary Committee. Congress' investigative arm, the General Accounting Office, shouldn't be "trying to impose disclosure on internal White House meetings to determine policy. ... If you have to do that, pretty soon there wouldn't be any meetings."

David Walker, head of the GAO, was to decide this week whether the GAO will sue to force the White House to turn over documents on the meetings held last year with business executives as the Bush administration crafted a new national energy policy.

Some of the meetings included officials from the now-collapsed Enron Corp., a Houston-based energy broker with deep ties to Bush.

In resisting the GAO, Cheney insists that providing the list of industry executives would harm his ability to receive advice in the future and that the congressional investigators are overstepping their bounds. GAO, as a congressional agency, insists it has the authority to request the information.

Although lawyers were negotiating earlier, Cheney said on Sunday the dispute "probably will get resolved in court." It would be the first time in the GAO's 80-year existence that it sued the executive branch.

House Majority Leader Dick Armey, R-Texas, said Tuesday he and House Speaker Dennis Hastert, R-Ill., planned to "talk to the agency."

"GAO is being pressured here on a partisan political basis, and they are wrong on the ground on which they are being pushed," Armey said.

Democrats on April 19 requested that GAO investigate the conduct, operations and funding of the Cheney energy task force.

Sen. Arlen Specter, R-Pa., said he was researching to see whether the GAO would be overstepping its authority by taking on the administration. "My concerns are that it would encroach upon the deliberative process and make it impossible for the vice president at the direction of the president to make a recommendation," Specter said. "It's also a tricky area on executive privilege."

However, Senate Republicans have not come up with a unified public position or a plan, Specter said. "There's been discussions on it but I would not say we've taken a position," he said.

However, "I think that somehow, individually or as a group, we should express concern to the GAO leadership," said Sen. Jeff Sessions, R-Ala. "I'm just amazed at this development. I don't think they're going to win in court, and if they don't win in court, they ought to be embarrassed.

"Congress shouldn't be eavesdropping on executive branch discussions," he added. "I think it's a legitimate separation of powers issue. If it's a question of criminality, they have the power to obtain it, but to snoop, to eavesdrop on conversations is not legitimate."


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FERC may probe Enron on California wholesale power pricing
Reuters.com
chron.com

WASHINGTON -- A member of the Federal Energy Regulatory Commission said Wednesday the agency should investigate whether bankrupt Enron Corp. manipulated wholesale electricity prices in California.

Houston-based Enron, accused by Western politicians of raising prices in long-term supply contracts following California's power crisis, has denied any wrongdoing.

"We need to clear up that lingering doubt," said FERC Commissioner Nora Brownell, a Republican appointee to the agency last summer. "If there was market manipulation, we need to find it and we need to deal with it."

Brownell, speaking to reporters after a routine FERC meeting, made her comments after FERC Chairman Pat Wood testified Tuesday before the Senate Energy Committee about Enron's impact on U.S. energy markets. Wood indicated during the hearing a willingness to open an agency investigation of Enron at the request of West Coast politicians.

Enron supported Brownell's appointment to FERC because she was a free-market advocate while a member of the Pennsylvania public utilities commission.

Wood has links to the Bush administration and Enron through his previous job as a Texas utility commissioner, where he advocated restructuring the state's power market. That drew the praise of former Enron Chairman Kenneth Lay, who pushed for Wood's appointment to head FERC.

The Houston-based company was among several independent power producers that enjoyed big increases in revenues early last year after Western spot market prices for wholesale power soared tenfold, to as high as $400 per megawatt hour.

The electricity crisis was linked to California's failed deregulation scheme that did not encourage new plant construction and barred the state's utilities from passing through higher wholesale prices to consumers.

The state signed long-term supply contracts for some $42 billion worth of wholesale power supplies during coming years. Those contracts have been criticized by activists and politicians as locking in prices well above market levels.

Still pending before a FERC administrative judge is California's demand for some $9 billion in alleged overcharges by Enron and a dozen other wholesale suppliers. That case is unlikely to be determined for several more months.

Brownell was noncommittal on what action FERC should take if any market manipulation was found to have occurred with Enron's sales into California.


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Bank Eexes Forced Out--Enron
HoustonChronicle.com
chron.com

After reporting last week it lost $231 million related to credit exposures to Enron Corp., Bank of America Corp. said Wednesday executives in its natural resources group, which manages Enron's account, have left the bank or plan to.

The nation's third-largest bank released on Jan. 22 its fourth-quarter earnings report, detailing Enron-related loan charge-offs and securities write-downs.

By the end of last week, three Texas-based associates, Jo Tamalis, Marcia Bateman and James Allred, had left the bank, said Bank of America spokeswoman Georgie Shields, adding that Steve Bragg, head of the natural resources group, announced his resignation.

The executives may be the first bankers to lose their jobs in the wake of Enron filing the largest bankruptcy in U.S. corporate history and forcing many U.S. banks to unexpectedly write off large loans made to the company.

Bank of America's chief competitors, No. 1 Citigroup and No. 2 J.P. Morgan Chase & Co., also had massive fourth-quarter losses related to Enron exposure.

Tamalis was a client manager in the natural resources group and "was involved in managing the relationship from a corporate perspective for several clients, including Enron," Shields said.

Reached at her Houston home, Tamalis said: "I worked for Bank of America for 21 years ... and I regret leaving."

However, she would not explain what prompted her departure.

Marcia Bateman was a credit products officer working in Dallas for the bank's portfolio management group. James Allred did the same job in Houston. Both managed credit exposures, but Shields would not say if they specifically worked on Enron's account.


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Budget Reality Casts Shadow Over Bush Agenda
Reuters.com

WASHINGTON (Reuters) - An ambitious wish list of initiatives set out by President Bush left many Democrats on Wednesday questioning how he plans to pay for it without racking up big budget deficits.

"He was trying to say something for everybody and he was trying to keep it somewhat nonpartisan," Rep. Robert Matsui, a California Democrat who sits on the tax-writing House Ways and Means Committee, told Reuters. "The problem we have is how are we going to pay for all of these things and I think he was trying to avoid that discussion."

In his State of the Union address Tuesday night, Bush promised the biggest increase in defense spending in two decades and a substantial increase in spending for domestic security to protect against possible terrorists attacks.

He called for a prescription drug program for the elderly and a health insurance tax credit for workers who have no coverage. He said he also wanted to make the Social Security retirement system financially stable and provide personal investment accounts for younger workers, a move that could mean more than $1 trillion in transition costs over the next decade.

He also appealed to lawmakers to pass his economic stimulus program, which includes business tax breaks and an acceleration of income tax cuts already in the pipeline to help spur economic growth.

But Senate Budget Committee Chairman Kent Conrad said the Bush plan amounted to "a return to red ink on a grand scale."

"You add up all the president's spending initiatives and making permanent the tax cut -- we add up $1.7 trillion. He's taking it all out of the Social Security trust fund," the North Dakota Democrat added.

The White House has said Bush's budget blueprint will project shortfalls of $106 billion in fiscal 2002, which began last Oct. 1, and $80 billion in fiscal 2003. That will include his proposed economic stimulus plan, which faces an uncertain fate amid partisan bickering over whether it should include mostly tax breaks for businesses and individuals or help for the unemployed.


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GAO to Sue White House
Reuters.com

WASHINGTON (Reuters) - The investigative arm of Congress said on Wednesday it would file an unprecedented lawsuit against the White House to get the names of people consulted by a task force headed by Vice President Dick Cheney that drafted the Bush administration's energy policy.

Among the details sought by the GAO in its first suit ever against the White House were the task force's contacts with energy companies, including Enron Corp., a major political contributor to President Bush, which has since collapsed.

"GAO (the General Accounting Office) will take the steps necessary to file suit in U.S. District Court in order to obtain ... the information," GAO Comptroller General David Walker said in a letter to congressional leaders and published on the agency's Web site.

FIRST LAWSUIT OF ITS KIND

times last year with Enron representatives, but that is only part of the information Walker seeks.

He wants the names of everyone who met with any member of the task force and its staff to discuss energy policy, as well as the attendees at group meetings, the names of the task force staff, the dates of the meetings and the cost of the project.

Walker began his pursuit of the task force records last spring at the request of Rep. Henry Waxman of California and Rep. John Dingell of Michigan, both Democrats.

The lawmakers suspect private-sector groups heavily influenced the White House energy plan. Waxman has said he found 17 policies in the May 2001 plan that were either advocated by Enron or benefited Enron.

Walker acknowledged his action was unprecedented. Aides said that although the agency had asked for similar information in the past, any conflicts had been settled out of court.

The 80-year-old GAO works for Congress, evaluating federal programs, auditing federal expenditures and issuing legal opinions. It is expected to be independent and nonpartisan.

"This will be the first time that GAO has filed suit to enforce our access rights against a federal official," Walker said in his letter to congressional leaders, copies of which were sent to Bush and Cheney.

As far as the White House is concerned, the GAO maneuver is about politics as well as the threatened erosion of presidential power. The senior administration official said he believed the GAO was under Democratic pressure to file suit.

The dispute has split Congress, with Republican leaders in both houses saying the GAO was not entitled to the information. But a few Republican senators have supported the GAO action.

Dingell rejected the politics charge, noting that Walker was a former official in the Republican administrations of Ronald Reagan and Bush's father, former President George Bush. "Mr. Walker has shown that this investigation is about principles, not politics," Dingell said.

Sen. Joseph Lieberman, whose Governmental Affairs Committee is probing Enron's fall, said he could not understand the White House refusal to release "basic information."

"I don't know why the Bush administration refuses to disclose that," the Connecticut Democrat said. "That makes me more suspicious than I otherwise would have been,"


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Jeb Bush's Daughter Busted
Reuters.com

noelleTALLAHASSEE, Fla. (Reuters) - Florida Gov. Jeb Bush's daughter Noelle, who is the niece of President Bush, was arrested on Tuesday on a charge of fraudulently trying to obtain the prescription anti-anxiety drug Xanax, police said.

Noelle Bush, 24, was arrested shortly after 1 a.m. on a charge of prescription fraud outside a pharmacy in the state capital, Tallahassee, police said. She was handcuffed and taken to the Leon County Jail and later released.

The governor, who is the president's younger brother, released a statement saying he and his wife Columba were "deeply saddened" over the incident.

"This is a very serious problem. Unfortunately substance abuse is an issue confronting many families across our nation," the statement said. "We ask the public and the media to respect our family's privacy during this difficult time so that we can help our daughter."

Asked about the arrest later at an unrelated news conference, the governor said only: "It's a private matter. It's really hard."

According to the arrest report, a woman phoned in the prescription to a pharmacy in Tallahassee, leaving the information on two voice mail messages. The pharmacist said he became suspicious because the caller did not specify a quantity, and checked with the answering service of the doctor who supposedly prescribed the drug.

Another doctor there told him the doctor in question "is moving and isn't really practicing now and said it was a fake and to bust her," according to the police report.

When Noelle Bush came to the drive-through window to pick up the prescription, the pharmacist phoned police and she was arrested, the report said. Police took the voice mail recording as evidence and said the voice on the tape and Noelle Bush's voice "appear identical," according to the arrest report.

Noelle is the governor's middle child. The couple also have two sons -- George P., aged 25, and Jeb Jr., 18. The arrest report listed Noelle's address as an apartment complex in Tallahassee.

President Bush's twin daughters, Jenna and Barbara, were arrested in 2001 on charges of underage drinking.

Xanax is the brand name for the anti-anxiety drug known generically as alprozalam, widely prescribed for short-term treatment of anxiety and panic attacks. It is made by Pharmacia Corp., though the generic version has been available from several manufacturers for about 10 years.

Commentary:
The question begs to be asked...does anyone in the Bush family believe in the "rule of law?"


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Curtains Cover Semi-Nude U.S. Justice Dept. Statues
Reuters.com

WASHINGTON (Reuters) - A cover-up at the U.S. Justice Department?

A Justice Department spokeswoman said on Monday about $8,000 has been spent for curtains to conceal two Art Deco aluminum statues of semi-nude figures in the building's Great Hall.

At one end of the stage is a 1930s era female statue representing the "Spirit of Justice." Though she wears a toga-style garment, one breast is exposed. At the other end of the stage, a male statue represents the "Majesty of Justice," and has a cloth draped by his waist.

Justice Department spokeswoman Barbara Comstock said the decision to install the curtains was made by Attorney General John Ashcroft's aide who handles advance work. "It was done for TV aesthetics," she said.

When Ashcroft on Nov. 8 announced plans to restructure the Justice Department to focus on terrorism after the Sept. 11 hijacked plane attacks, photographers took pictures showing him with the towering female statue in the background.

"He did not know this was being done," Comstock said. "The attorney general has more important things to do than worry about what appears in pictures."

Log this under, "These People Have Way Too Much Time On Their Hands."

The statues were hidden by curtains on Nov. 20, when President Bush came to the Justice Department to name the building after the assassinated former attorney general, Robert Kennedy.

Log this under, "Symbolism Over Substance."

Those curtains were rented. Comstock said the decision then was made to buy dark-blue curtains and install them because it would be more "cost efficient."

On Monday, a day with no public events in the Great Hall, the curtains, with the Justice Department emblem in the center, were placed across the stage, concealing the statues.

A former Justice Department official e-mailed a copy of an article about the statues to colleagues, adding the caption, "homeland security?"

The most famous picture of the female statue came in the 1980s, when Attorney General Edwin Meese released the final report of his commission on pornography.


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