LONDON (Reuters) - British politicians reacted angrily Wednesday to an "insulting" putdown from Defense Secretary Donald Rumsfeld that they were bleating from afar about the treatment of al Qaeda and Taliban prisoners.

Rumsfeld sits is a plush office and whines when our allies dare to question him. Is there anyone left in this Administration with character or integrity?

Images of detainees shackled and on their knees in cages at Guantanamo Bay -- a U.S. base in Cuba -- have sparked outrage around the world not least in Britain, the United States' staunchest ally following the attacks of September 11.

At a Pentagon briefing Tuesday, Rumsfeld said it was easy for critics to carp from a "comfortable distance."

And Rumsfeld isn't carping from a "comfortable distance?" Can we say moron?

"It's amazing the insight that parliamentarians can gain from 5,000 miles away," he said in singling Britain out.

British lawmakers, notably from Prime Minister Tony Blair's own party, said they deserved better than sarcasm having stood unflinchingly by the United States when it attacked Afghanistan.

"We've supported the United States. It seems rather crass to dismiss legitimate concerns out of hand," Ann Clwyd, Labor MP, said. "We don't want to be insulted by Donald Rumsfeld."

Menzies Campbell, foreign affairs spokesman for the Liberal Democrats, said the "war on terror" was not just about military action in Afghanistan but winning hearts and minds in the Middle East and Arab world.

"We here in Britain may be 5,000 miles from Cuba. But we are much closer to the Middle East than (Rumsfeld) is in Washington," he said.

Human rights groups say the United States has no right to refuse to categorize the detainees as prisoners of war, a designation that would give them extensive rights under the Geneva Convention.

"It really isn't up to Rumsfeld to decide whether they are prisoners of war," Clwyd said.

The Brits still don't get it. Bush and Co. think the rule of law doesn't apply to them.

U.S. EMBASSY TIRADE

Clwyd, who heads the cross-party parliamentary Human Rights Group, met the number two at the U.S. embassy in London on Wednesday to raise her concerns along with eight other MPs.

"There was really a lot of outrage about Mr. Rumsfeld's comments," she said.

The government, keen to squash talk of a rift, refused to get involved. Blair's spokesman said he did not speak for Rumsfeld but noted that British officials visiting Guantanamo Bay had reported the prisoners were being well treated.

But Donald Anderson, Labor chairman of parliament's Foreign Affairs Select Committee -- the watchdog of government foreign policy -- said MPs had been right to ask questions.

"Some of those (concerns)...may have been allayed. Others remain," he told Sky Television. "It is not for the captor to decide unilaterally whether they are prisoners of war or not."

He said the images of the detainees in cages could hamstring potential allies and act as perfect recruiting material for militants in the Arab world.

"Countries who may want to cooperate may find it more difficult because their own populations may be made angry."

Chris Patten, European Commissioner and former chairman of the Conservative Party, also warned the Americans they risked alienating allies around the globe.

"Having won the (military) campaign it would be a huge error if the international coalition were to lose the peace," he said.

WASHINGTON (Reuters) - President Bush on Wednesday named Cynthia Glassman and Isaac Hunt to temporary terms on the Securities and Exchange Commission to help the watchdog grapple with Enron Corp.'s collapse, the White House said.

The appointment of Glassman, now with accounting firm Ernst & Young, and Hunt, whose term as an SEC commissioner recently expired, will shore up the five-member commission, which has three vacancies and a fourth member who wants to leave.

We can blame this problem on the republican Senate during the Clinton years. See SEC Chairman tied to Enron

The White House said Glassman, a Republican, and Hunt, a Democrat, were given recess appointments, meaning they may serve until Congress recesses again, which is expected at the end of the year.

Both appointments normally require the approval of the U.S. Senate, but Bush acted under a provision of U.S. law allowing such "recess" appointments while the Senate is not in session.

The White House said Bush used the loophole because of the SEC vacancies and the need for it to be well-staffed to grapple with the issues stemming from the collapse of Houston-based energy trader Enron, which declared bankruptcy last year.

No such loophole exists. A lie!

"There are obviously some very critical issues that will be coming before the SEC in the near future," said White House spokeswoman Anne Womack. "The president wanted to ensure that the SEC had both the manpower to handle the issues as well as having a balanced perspective while doing it."

Then why not wait until the Senate gives it's consent? Can we conclude the constitution has no meaning to this Administration? Yes. Does the rule of law have meaning? No!

Houston-based Enron declared bankruptcy on Dec. 2, the biggest filing of its kind in U.S. history, and has since become the object of investigations by the Justice Department, the SEC and a string of congressional committees.

Thousands of employees lost their jobs and some lost their life savings in the former Wall Street darling's downfall, which began when the company acknowledged several hundred million dollars in previously undisclosed liabilities.

The investigations are focusing in part on whether Enron may have misled investors about its accounts and on the role played by its auditor, Andersen.

In reaction to Enron's troubles, SEC Chairman Harvey Pitt has proposed curtailing the accounting profession's self-policing and suggested a tougher supervisory body that would include non-accountants.

Commentary:
The Constitution requires these appointee's to be approved by the US Senate.

On this day, Mr. Bush becomes eligible for articles of   impeachment and removal from office for violating article 2, section  2  of the Constitution.

"He shall have power, by and with the advice and consent of the Senate, to make treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States..."

"The President shall have power to fill up all vacancies that may happen during the recess of the Senate, by granting commissions which shall expire at the end of their next session."

Since the vacancies did not happen "during the recess of the Senate", Bush has violated the Constitution and should be removed from office.

In January 2001, CBO projected that under the laws and policies then in force, the federal government would run surpluses in fiscal years 2002 through 2011 totaling $5.6 trillion.(1) In CBO's new projections, that cumulative surplus has fallen to $1.6 trillion--a drop of $4 trillion.

Those who insist on making policy based on 10 year projections, which includes Bush, almost all republicans in congress and conservative democrats need to reread the above paragraph a thousand times so they don't forget how WRONG they were

About 60 percent of that decline results from legislation--the tax cuts enacted in June and additional discretionary spending--and from its effect on the cost of paying interest on the federal debt. Changes in the economic outlook and various technical revisions since last January account for the other 40 percent of that decline.

The deficit projected for this year--$21 billion--represents a change of more than $300 billion from last January's projection. Over 70 percent of that reduction results from the weak economy and related technical factors, which have considerably lowered the revenues expected for this year and next.

Hold the presses. Lower revenue? How's this possible? According to conservative dogma tax cuts always raise revenue. Now we have it...tax cuts DO NOT raise revenue. Will Bush now fix the mess HE created? Not a chance.

THE BUDGET OUTLOOK

For the five years from 2003 through 2007, CBO projects a cumulative surplus of $437 billion. That figure represents off-budget surpluses totaling more than $1 trillion offset by on-budget deficits that add up to $617 billion. For the 10-year period through 2012, the total budget surplus under current policies is projected to approach $2.3 trillion. Again, that amount is made up of surpluses in Social Security ($2.5 trillion) offset by a cumulative on-budget deficit ($242 billion). Without the scheduled expiration of tax-cut provisions in 2010, the total 10-year budget surplus would fall to $1.6 trillion.

The only surplus we'll have over the next ten years will come from the Social Security trust fund. If democrats can't win on this issue alone, they should close up camp

Changes in the Past Year

As an illustration of how quickly the budget outlook can change, CBO's projection of the cumulative surplus for 2002 through 2011 has plunged by $4 trillion in just one year. Some $2.4 trillion of that drop can be attributed to legislative actions. The legislation with the largest effect was the Economic Growth and Tax Relief Reconciliation Act of 2001, enacted in June. That law is estimated to reduce surpluses by nearly $1.3 trillion over 10 years (not including associated debt-service costs).

A four trillion drop in ONE YEAR and Bush isn't willing to admit he was wrong. What does it take, a $5 trillion drop in one year?

"The legislation causing the largest drop is the tax cut." Will this be the headline story for the next six months? Nope...can't have an informed electorate. Watch the press bury this.

Additional discretionary spending since last January accounts for another $550 billion reduction in the projected surplus for the 2002-2011 period. That amount stems from both regular and supplemental appropriations. CBO's January 2001 baseline assumed that discretionary budget authority for 2002 would total $665 billion.(3) The actual amount appropriated for 2002 in the 13 regular appropriation acts totaled $691 billion. In addition, the Congress and the President enacted $20 billion in supplemental budget authority in December as part of their response to the terrorist attacks of September 11--thereby generating a total of $711 billion in budget authority for 2002, $45 billion more than CBO assumed last January.

Changes in the economic outlook since January 2001 account for another $929 billion decline in the 10-year surplus. About three-quarters of that total reflects lower revenue projections, mostly resulting from the substantially weaker economic growth expected in the near term and the slightly lower average growth rates projected for the following several years. Much of the rest of the decline attributable to the economic outlook represents additional debt-service costs resulting from the reduction in anticipated revenues.

Wow, what's going on here? "substantially weaker economic growth expected in the near term and the slightly lower average growth rates projected for the following several years." This should be economic news around the world. How can we have less growth after a recession? Growth almost always increases after a recession because of pent up demand.

Technical changes--those not driven by new legislation or by changes in CBO's economic forecast--have reduced the projected 10-year surplus by a total of $660 billion since last January. As with the economic changes, revenues account for over 75 percent of the technical changes, and debt service accounts for much of the rest. The technical changes to revenues stem primarily from revised projections of capital gains realizations and adjustments for lower-than-expected tax collections in recent months.

The tax cut etc. will cost us about $165 billion in more debt service. So not only does the next generation have to pay for our tax cut, but they have to pay for the interest on the debt. This alone should be moral grounds to impeach every member of congress and the president who voted for it.

The Outlook for Federal Debt

In the January 2001 Budget and Economic Outlook, CBO estimated that federal debt held by the public would reach a level in 2006 that would allow the Treasury to retire all of the debt available for redemption. At that time, CBO also projected that the statutory ceiling on all federal debt (which includes debt held by government accounts) would not be reached until 2009. Now, CBO estimates that debt held by the public will not be fully redeemed within the 10-year projection period and that the current debt ceiling will be reached in the next few months.

Stop the presses again. Bush promised to retire the debt in 10 years. Now CBO has no clue when it can be done. Can we say failure loud enough for Bush to hear it?

UNCERTAINTY OF THE PROJECTIONS

SOURCE: Congressional Budget Office. NOTES: This figure shows the estimated likelihood of alternative projections of the surplus under current policies. The calculations are based on CBO's past track record. CBO's baseline projections fall in the middle of the darkest area. Under the assumption that policies do not change, the probability is 10 percent that actual surpluses will fall in the darkest area and 90 percent that they will fall within the whole shaded area.

Actual surpluses will of course be affected by legislation enacted during the next 10 years, including decisions about discretionary spending. The effects of future legislation are not included in this figure.

An explanation of how this probability distribution was calculated will appear shortly on CBO's Web site.

White House arithmetic is always a creative subject, and Democrats say that last week it reached impressive new levels of inventiveness. On Wednesday, as Senator Edward M. Kennedy, Democrat of Massachusetts, called for delaying the administration's scheduled income tax cuts in 2004 and 2006 for the most prosperous families in America, President Bush and his minions could hardly restrain their glee.

A delay in a tax cut is nothing less than a tax increase, they declared. But what else to expect, they asked, from the Democrats?

Mr. Bush was one of the first out of the gate in a midterm election year with the latest in administration math. In the Oval Office on Wednesday afternoon, a reporter had only to utter the words "Senator Kennedy called for" before the president jumped in. "Oh, let me comment," he said. "I appreciate that very much."

He then said: "Those who want to revoke the tax cut, basically raise taxes, are those who just don't share my view. I think raising taxes in the midst of a recession is wrong economic policy."

Wrong for whom? The economy or the rich. Read a little further and you'll see.

Ari Fleischer, the White House press secretary, offered up additional calculations the same day. Asked at a briefing if it was fair and accurate to describe Mr. Kennedy's call for a delay in the tax cut as a tax increase, Mr. Fleischer responded: "Y-E-S, yes. When you tell the American people that we promise you, and it's the law of the land, that you are going to have more money in your next paycheck, and then the Democrats say, `We're going to take that money out of your paycheck' to the American people, that is nothing but a tax hike."

So passing a budget with deficit spending is ok? Of course not. Deficits have to be paid by someone and those poor saps get to pay for the accumulated interest costs too. This White House doesn't believe in paying for what it spends.

Time out.

Didn't Jeb Bush, the governor of Florida and the president's brother, sign into law last month a delay in a scheduled state tax cut on intangibles like stocks to fill gaps in Florida's ailing budget? Therefore is that not, using the White House math, a tax increase?

"That's a state matter, and the president doesn't weigh in on state matters," Mr. Fleischer somberly replied.

Vice President Dick Cheney, asked last month by Tim Russert on the NBC program "Meet the Press" whether the president would follow his brother's lead and roll back his tax cuts, came up with this: "I think those are different circumstances, Tim. I think if you think about it, you know, what a state does is much more fiscal management, whereas what we're talking about at the federal level is what really governs the overall shape and direction of our economy."

Are we to believe the economy of a State is not affected by tax increases? or cuts?

It was finally left to Marc Racicot, the new chairman of the Republican Party, to break loose from the White House logic. Asked yesterday by Mr. Russert on "Meet the Press" if Jeb Bush was, in fact, raising taxes, Mr. Racicot at first stalled, then distinguished himself on national television as the first member of the inner circle to toss the president's younger brother over the side.

This comes from a former lobbyist for Enron. Need I say more?

"The nomenclature can be debated time and time again," Mr. Racicot genially responded. "But this is a scheduled tax-relief measure for millions and millions of American families and clearly if it's not going to go into place, then one perspective most certainly is that it's raising revenue."

Mr. Russert pressed in on his prey. So, he asked, is Governor Bush raising taxes?

"I think that argument can be made in all fairness, yes," Mr. Racicot conceded.

Lie!

Democrats, not surprisingly, say that both Mr. Racicot and the White House are wrong, and that a delay in a tax cut is just that, a delay in a tax cut. More important, they say, is that Mr. Kennedy's proposal to roll back future cuts — so the nation can afford better health and child care, he says — would affect only the top 5 percent of American families.

Under the Kennedy proposal, families of four making less than $130,000 a year would still get all of the scheduled cuts under the $1.35 trillion, 10- year tax relief package that Mr. Bush signed into law last year. For example, a family of four making $50,000 a year will get a tax cut of about $800 in 2002 and $1,017 in 2006.

Under the Kennedy plan, the richest families would still get their tax cuts scheduled for 2002, but would not get as big a cut in 2004 and 2006.

According to an analysis prepared by the Center on Budget and Policy Priorities, a liberal group, families with annual incomes of $1 million are scheduled to receive a tax cut of $7,133 in 2002 under the new Bush administration law. Mr. Kennedy would keep that tax cut in place.

In 2006, under the Bush administration law, those million-dollar families are to receive a tax cut of $31,406, the budget center said. Mr. Kennedy, according its analysis, would hold the tax cut to $8,954.

So is that a tax increase?

"No one is getting their taxes raised," said Gene Sperling, who was President Bill Clinton's chief economic adviser. "The only debate is how large the tax cuts should be for the top 5 percent."

Say what you want about the Clinton team but no one can question them on economics and budgets. They're the ones who gave us the largest surpluses and the longest peacetime economic expansion in US history. Bush's first full budget already has a deficit and we're in a recession.

Robert D. Reischauer, the former director of the Congressional Budget Office who is now president of the Urban Institute, a research center, had another answer. "This isn't budgeting," he said. "It's politics."

Commentary:
When you can't win with the facts, lie. Bush and Co. are becoming seasoned experts. The sad part is someone is going to have to pay for these tax cuts at some point. Deficits are projected for years to come by Bush's own Budget Office. We won't accuse the Bush team of being honest?

By Adam Entous

WASHINGTON (Reuters) - The Bush administration intervened with top Indian officials last year in a bid to salvage an Enron Corp. project in India, according to documents released on Friday that shed new light on the administration's relations with a major financial backer.

The White House said the effort, involving Vice President Dick Cheney and other senior officials, was justified because the $2.9 billion Dabhol power project was financed in part through the U.S. government's Overseas Private Investment Corporation (OPIC), a taxpayer-backed agency that provides "political risk" insurance and loans to help U.S. companies invest in developing nations.

So, the cover-up begins to unravel. Since the beginning of this scandal the White House has said they did nothing for Enron. Now, we know it was a lie.

The White House denied the push was influenced by Enron's political contributions. Enron was Bush's biggest backer heading into the 2000 presidential election, giving about $623,000 to his campaigns since 1993, when he was raising money for his first Texas gubernatorial race.

OPIC's exposure to the Dabhol project amounted to $340 million in both insurance and loans. In a Nov. 6, 2001 letter to India's national security adviser, OPIC President Peter Watson said the issue had risen "to the highest levels of the United States Government (and) could force OPIC to close its programs entirely in India."

Watson's letter followed a June meeting between Cheney and Indian officials in which the vice president brought up the Enron project. In the months to follow OPIC would prepare "talking points" on Dabhol for Bush's meeting on Nov. 9 with Indian Prime Minister Atal Behari Vajpayee.

Bush did not bring up the issue, however, according to the documents and White House officials.

Just days before Vajpayee came to the White House, Enron chairman Kenneth Lay had called Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans, Bush's 2000 campaign manager, to warn them of the company's mounting financial problems.

Enron President Lawrence "Greg" Whalley called Treasury Undersecretary Peter Fisher in late October and early November, seeking help for the energy-trading giant, which on Nov. 8, the day before the Bush-Vajpayee meeting, disclosed that it had overstated earnings dating back to 1997 by almost $600 million. The company filed for bankruptcy on Dec. 2, the largest in U.S. history.

In recent weeks the White House has sought to distance itself from the widening scandal surrounding Enron. The White House says it monitored the situation but did nothing to help the Houston-based company avert collapse.

WHITE HOUSE DEFENDS DABHOL EFFORT

Enron owns 65 percent of Dabhol, General Electric Co. and construction firm Bechtel Corp. each own 10 percent and the Maharashtra State Electricity Board (MSEB) the remaining 15 percent.

White House spokesman Ari Fleischer defended the administration's intervention. "The United States taxpayers have an exposure to risk and loss through OPIC," he told reporters.

We already know the collapse of Enron was not avoided and we know it will cost taxpayers at least $1 billion. What did Cheney really do for the taxpayer? Oops, for Enron?

"It's not uncommon for (companies) to have exposures which do require contacts between American officials and government officials in other countries to minimize those risks to taxpayers."

Fleischer noted that former President Bill Clinton's commerce secretaries had made similar appeals on behalf of Dabhol at various stages.

Did President Clinton owe his political life to Enron? Don't get side-tracked.

In addition to OPIC's exposure, Fleischer said the U.S. Export-Import Bank had made $300 million in direct loans toward the project.

The Dabhol plant, about 155 miles (250 km) south of Bombay, has been idle since June due to a tariff dispute with its sole customer, MSEB, the government-run monopoly distributor of electric power in the area.

The Bush administration was pressing the Indian government to reach an agreement with Enron and other investors to revive the stalled project. "It is an important project to create jobs in America," Fleischer said.

So the help Enron received from Bush, which he lied about, was really an attempt to create more jobs. Got it.

According to government documents obtained by Reuters, Cheney raised the Enron issue at a June 27 meeting in Washington with Sonia Gandhi, the leader of the main Indian opposition Congress party.

"Good news is that the Veep mentioned ENRON in his meeting with Sonia Gandhi yesterday," a National Security Council (NSC) official said in an e-mail dated June 28. The name of the official was blotted out before its release.

Would someone please explain why the National Security Council were involved in helping Enron?

The White House said on Friday that Cheney had simply inquired into the project's status and denied that anyone from Enron had asked the vice president to intervene with Gandhi.

In his Nov. 6 letter to India's National Security Adviser Brajesh Mishra, Watson pressed New Delhi to resolve the matter, saying: "Without substantial and demonstrable progress in the resolution of Dabhol, I cannot see a way for OPIC to support the new venture."

"As a result of the lack of action by the Government of India, we anticipate Dabhol will be raised during Prime Minister Vajpayee's visit to Washington this week," Watson wrote.

An earlier e-mail, dated Nov. 1, included what it called "OPIC's talking points on Dabhol prepared for the President's meeting with Prime Minister Vajpayee."

But before the White House meeting, a Nov. 8 e-mail labeled "High" priority by its unidentified author, said Bush "cannot talk about Dabhol" in his meeting with Vajpayee. Instead, the e-mail said national security adviser Condoleezza Rice would do so when she met Mishra.

Everyone in the Bush Administration either worked for or helped Enron, including his National Security Adviser, but Bush knew nothing? Does anyone believe this? The cover-up continues.

The Nov. 8 e-mail noted that Lawrence Lindsey, chairman of Bush's National Economic Council, had met Mishra on Nov. 7, but it said Lindsey was "advised that he could not discuss Dabhol." Lindsey is a former Enron consultant and had served on its board of advisers.

US officials can't help Enron because they were bought by and/or worked for Enron. But those in the government not bought by Enron who work for Bush can talk to them. The cover-up continues to unravel.

A final e-mail, dated Nov. 9, said Rice did not discuss Dabhol with Mishra.

Likewise, Bush did not raise the issue in his talks with Vajpayee, the White House said.

"The vice president had raised it earlier, and the determination was made that this would be one of the issues that did not rise to the president's level," Fleischer said on Friday.

And Pigs Fly!

Does using the NSC for political purposes fall under an impeachable offense? How about lying to the American people about not helping Enron?

The Bush lies have "undermined the integrity of his office, has brought disrepute on the Presidency, has betrayed his trust as President, and has acted in a manner subversive of the rule of law and justice, to the manifest injury of the people of the United States."

GUANTANAMO BAY NAVAL BASE, Cuba (AP) The United States came under new pressure Wednesday to recognize the al-Qaida and Taliban prisoners at this Navy base as POWs.

Some British legislators asked for a meeting with the U.S. ambassador in London to express concern about the prisoners.

"You can't play around with human rights ... and the rights of such prisoners are set out in the Geneva Conventions which both the U.S. and ourselves are signed up to," said Ann Clwyd, chairwoman of Parliament's Human Rights Committee.

Deputy Prime Minister John Manley of Canada, speaking during a trip to Pakistan, said the "prisoners need to be treated in accordance with humane norms and international law. And we expect the United States will do so."

The United States has been careful not to use the term "prisoners" because those detained would then be covered by the Geneva Conventions.

Under the conventions, POWs must be tried by the same courts and under the same procedures as U.S. soldiers. They could be tried for war crimes through courts-martial or civilian courts but not by military tribunals.

"The question of legal status is not just an academic question, it is a question of life and death," said Avner Gidrone, a senior policy adviser for London-based Amnesty International.

"If the intention is for the United States to try these prisoners through a military commission, it would almost certainly carry the death penalty, would not meet international standards and would violate standards of due process."

A group of British diplomats was at Guantanamo Bay Naval Base Saturday to inspect conditions of three detainees who say they are British.

The U.S. military also allowed a Red Cross team to visit the facilities and interview detainees this week. The Red Cross has said its report will be confidential, shared only with U.S. officials.

Brig. Gen. Mike Lehnert, the head of a task force in charge of the detention mission, said both groups were being given "full access" and that Red Cross officials are being allowed to interview detainees in "full privacy."

U.S. officials say the prisoners are being treated as humanely as possible considering the danger they present. Some have threatened to kill their American captors and, Lehnert said, one bit a guard on the forearm Wednesday.

The inmate had become "somewhat upset" while being escorted to another cell, Lehnert said, adding no "violence" was used to subdue him.

The bite did not break the guard's skin, and the prisoner was held in a separate cell for a few hours, he said.

The Geneva Conventions also dictate that prisoners be housed in the same conditions as their captors. In Guantanamo, soldiers are staying in stucco houses and tented camps.

Some 110 prisoners, including people believed to be citizens of Britain, Saudi Arabia, Yemen and Australia, are being held in temporary cells with walls of chain-link fence covered by a corrugated metal roof.

Amnesty International says the camp's cells eight-by-eight feet are below U.S. standards for ordinary prisoners.

Lehnert said Saturday that the prisoners had more space than Marines, housed two to a tent that gives the soldiers' 40 square feet each, compared 64 square feet for detainees in individual cells.

"Of course, they (the Marines) have their freedom," he added.

The prisoners hair and beards have been shaved off and they are dressed in long-sleeved orange jumpsuits. Temperatures at the base have soared over 90 degrees, tempered by tropical breezes. It has rained but not so much as to get the inmates wet, the military says.

The temporary cells will soon be able to hold 320, or more if inmates are housed two to a cell until a permanent prison under construction is ready. The permanent facility would hold up to 1,000 inmates, Lehnert said Saturday. Previously officials had said it would hold 2,000.

American taxpayers are potentially on the hook for more than $1 billion tied up in a dozen Enron Corp. energy projects around the world, according to government documents.

The projects span the globe from Argentina to the Philippines and include an electric plant in India that has drawn Vice President Cheney into the budding scandal.

"Combined maximum exposure to projects sponsored by Enron is $1.059 billion," officials of the Overseas Private Investment Corp. reported in an internal Dec. 10 memo analyzing the potential consequences of Enron's Dec. 2 bankruptcy.

OPIC backs U.S. companies with projects in foreign countries where financing and government instability would otherwise make them too risky.

White House spokesman Ari Fleischer cited $640 million in "taxpayer exposure" as a key reason why Cheney interceded in the foundering Enron project in Dabhol, India.

June Meeting Defended

Fleischer was questioned after the Daily News reported yesterday that Cheney raised Enron's problem in Dabhol with Indian opposition leader Sonia Gandhi in a June 27 meeting.

An effort quarterbacked by President Bush's National Security Council included pressure on India by the State and Treasury departments.

Fleischer said the efforts were to protect potential taxpayer liability — not to do a favor for a company whose executives have been Bush's biggest political contributors.

Dabhol is "an important project to create jobs in America, and there's also a taxpayer exposure," Fleischer said.

Nevertheless, Fleischer shrugged off a Nov. 8 National Security Council memo that warned Bush "can not talk about Dabhol" during his meeting with India's Prime Minister Atal Bihari Vajpayee on Nov. 9.

Bush Kept His Distance

Fleischer indicated there was no ethical reason Bush was barred, and said, "The vice president had raised it earlier, and the determination was made that this would be one of the issues that did not rise at the President's level."

He added that the White House counsel "did recommend to Larry Lindsey that he have no direct involvement in the Dabhol plant as a result of his previous holdings with Enron."

Lindsey, Bush's economic adviser, was a $50,000-a-year consultant to Enron.

OPIC spokesman Larry Spinelli insisted Enron's bankruptcy has no effect on OPIC's Enron projects because of the way it structures its deals.

But the OPIC memo says of Dabhol that Enron's bankruptcy "further complicates this already very complex matter," and indicated that OPIC was scrambling to take stock of potential Enron liability in the aftermath of the bankruptcy.

"We are a U.S. government agency and we are backed by the full faith and credit of the United States," Spinelli said.

Spinelli acknowledged that "taking the worst-case scenario," taxpayers could foot the bill if Enron-related deals fall through abroad.

About 63% of Americans think the White House is either hiding something or lying about its ties with the company, according to a CBS News poll released yesterday.

Just under half of those polled also thought the oil industry has too much influence in the administration.

The poll of 1,030 adults was taken Tuesday through Thursday. It had a margin of error of plus or minus 3 percentage points.

WASHINGTON (Reuters) - The head of the U.S. Congress' investigative arm said on Wednesday he is trying to gauge congressional support for a possible court showdown with the White House over its refusal to give details of how it formulated its energy policy.

Comptroller General David Walker also said he would not drop his probe of the White House energy task force that wrote the policy and its contacts with industry -- including Enron Corp. -- simply because he formerly was a high-ranking official with Enron's auditor, Andersen.

He never did any work for Enron, Walker told Reuters in an interview. But he said if there is ever a request for the General Accounting Office he heads to specifically probe something related to Andersen, he would recuse himself from that matter.

WALKER SEVERED ALL TIES WITH ANDERSEN

Walker worked for Andersen before becoming Comptroller General in November 1998, but not on Enron accounts, he said.

He had been a partner and global managing director of Arthur Andersen LLP's human capital services practice and a member of the board of Arthur Andersen Financial Advisors.

"I have severed all ties with Andersen," he said. "I have no financial relationship, no relationship whatsoever, I don't get a pension, I don't get benefits."

"Still, in the unlikely event that GAO would be asked to do work specifically analyzing what Arthur Andersen did in connection with Enron, just for appearance reasons, I would recuse myself from that type of request," he said.

Commentary:
Is there anyone in Washington who didn't work for Enron or Andersen? It looks like the Bush-clan thought Enron was the company to take care of. Some argue he did nothing for them when they were on the verge of bankruptcy. Bush sucked his cash cow dry then let it die.

During the record-breaking 1999-2000 fund-raising cycle, very few companies outpaced Enron's prolific giving to George W. Bush. In fact, only 11 companies gave more money to the Bush-Cheney ticket, and one of them was Arthur Andersen, the embattled energy giant's now equally troubled auditor.

Andersen was the fifth biggest donor to Bush's White House run, contributing nearly $146,000 via its employees and PAC. Furthermore, Andersen fielded one of Bush's biggest individual fund-raisers that year. D. Stephen Goddard, who until yesterday was the managing partner of Andersen's Houston office, was one of the "Pioneers," individuals who raised at least $100,000 for the Bush campaign during 1999-2000. (Goddard was among the employees "relieved of their managerial duties" Tuesday by Andersen.)

But that's only the tip of the iceberg when it comes to Andersen's political ties to Washington. As Congress prepares to launch hearings into the Enron collapse, lawmakers will be examining two companies whose political giving has affected the bottom line of nearly every campaign on Capitol Hill. Since 1989, Andersen has contributed more than $5 million in soft money, PAC and individual contributions to federal candidates and parties, more than two-thirds to Republicans.

While Enron's giving was concentrated mainly in big soft money gifts to the national political parties, Andersen's generosity often was targeted directly at members of Congress. For instance, more than half the current members of the House of Representatives were recipients of Andersen cash over the last decade. In the Senate, 94 of the chamber's 100 members reported Andersen contributions since 1989.

Among the biggest recipients, members of Congress now in charge of investigating Andersen's role in the Enron debacle—a list that includes House Energy and Commerce Committee chairman Billy Tauzin (R-La.), who, with $57,000 in contributions, is the top recipient of Andersen contributions in the House.

In the fall of 2000, Tauzin helped broker a deal between the Securities and Exchange Commission and the Big Five accounting firms, including Andersen, which essentially dropped the SEC's push to restrict auditors from selling consulting services to their clients. The provision had been aimed at ending what the SEC had deemed a major conflict of interest between accountant's duties as an auditor and the money they earn to consult on behalf of that same client.

Before the SEC could act, however, the accounting industry unleashed a massive lobbying campaign to block the proposed rule. In Andersen's case, it nearly doubled its campaign contributions—going from $825,000 in overall spending during the 1997-98 election cycle to more than $1.4 million in 1999-2000. In lobbying expenditures alone, Andersen spent $1.6 million between July and December 2000—compared to $860,000 for the first six months of that year.

It's unclear what kind of impact, if any, the proposed rule might have had on the Enron collapse. Andersen, according to press reports, collected $25 million in auditing fees and $27 million in consulting fees from Enron during 2001.</ p>

Enron Corp. paid no income taxes in four of the last five years, using almost 900 subsidiaries in tax-haven countries and other techniques, an analysis of its financial reports to shareholders shows. It was also eligible for $382 million in tax refunds from the Treasury.

The company used strategies common among U.S. businesses to avoid taxes. It also used some unusual methods, including the creation of 881 subsidiaries abroad, including 692 in the Cayman Islands, 119 in the Turks and Caicos, 43 in Mauritius and eight in Bermuda. Two Enron subsidiaries have been accused by a group of insurers of engaging in sham transactions in a tax haven, according to court papers in a New York lawsuit.

Enron is by no means alone in not paying income taxes. A small but growing percentage of large U.S. companies pay no income taxes, a study by Citizens for Tax Justice showed in October 2000. The study of half the Fortune 500 companies found that 24 owed no tax in 1998, up from 13 in 1997 and 16 in 1996.

While it is common for American companies to create subsidiaries in tax havens abroad, Enron had far more than most other companies, tax experts said.came under attack from the Treasury Department and the Internal Revenue Service during the Clinton administration.

The basic technique involves having profits go to a partner not subject to American income taxes, such as a bank in a country that is a tax haven. The partner, after taking its fee, then returns the profits in a form that is recognized as not taxable by American law.

Enron avoided taxes for another big reason: deductions for stock options. When executives exercise stock options the company takes a deduction on its corporate income tax return equal to the profit realized by the executive, even though it is not required to show an expense on its profit-and-loss statement to shareholders. The benefits to the company can be great, particularly if a soaring stock price leads to the exercise of large numbers of options. That was true at Enron when its shares were soaring in 1998 through 2000.

It is not clear from Enron's financial reports how much the tax haven operations reduced the company's taxes. But Enron did disclose that deduction for stock options alone turned what would have been a tax bill of $112 million in 2000 into a refund of $287 million.

Indeed, Enron paid taxes in only one of the years between 1996 and 2000, while the government paid the company hundreds of millions of dollars in refunds.

The analysis of Enron's tax payments was performed by Citizens for Tax Justice, an organization that is backed by labor unions. Its calculations are widely accepted by groups with sharply different views.

Mark Palmer, a spokesman for Enron, said Wednesday he was unable to comment on the tax issues. International tax experts said corporations create offshore subsidiaries in tax havens for a variety of legitimate reasons, including keeping profits earned overseas from being taxed in the United States and insulating foreign business partners from U.S. tax law. Enron Corp. paid no income taxes in four of the last five years, using almost 900 subsidiaries in tax-haven countries and other techniques, an analysis of its financial reports to shareholders shows. It was also eligible for $382 million in tax refunds from the Treasury.