By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
Enron's political clout, money and family ties permeated almost every aspect of public life in Houston. That's no secret, and it was dramatically underscored when newly installed U.S. Attorney Mike Shelby disqualified himself and his staff from investigating the economic rubble of the fallen giant.
But one connection that stretched into the federal judiciary has yet to be fully divulged.
Creditors asked U.S. District Judge Lee Rosenthal to freeze the assets of top Enron executives, including Ken Lay, Jeff Skilling and Andrew Fastow. Rosenthal declined to do so, although her initial ruling left the door open for future action. But the judge, who is highly regarded by local lawyers, abruptly recused herself from the case without explanation, tossing the hot potato to colleague Melinda Harmon.
A Republican courts source says the reason for Rosenthal's recusal is no secret in GOP circles. The former Baker & Botts attorney had been elevated to the federal bench by George H.W. Bush during his final months as president in 1992. Last spring, she sought appointment by President George W. Bush to a position on the Fifth Circuit Court of Appeals. His nod eventually went to Texas Supreme Court Justice Priscilla Owen.
Lay, according to the source, had lobbied unsuccessfully with the White House to get Rosenthal appointed, and wrote a letter to White House officials on her behalf. At the time, Baker & Botts attorneys bragged that Rosenthal was a cinch for the appointment because of her Lay connection. Another ardent booster of Rosenthal's was Daryl Bristow, a Houston lawyer who represented Bush in the Florida ballot fight that ended with a Supreme Court ruling that effectively made Bush president. Rosenthal's husband, Gary, is a prominent local Republican and former Vinson & Elkins attorney who became an energy company owner. The effort to win Rosenthal the Fifth Circuit position apparently foundered because of conservative opposition to her moderate views on social issues like abortion. Owen, still awaiting confirmation, has her own Enron problems stemming from Lay's contributions to her state Supreme Court campaign.
Judge Rosenthal declined comment, and Enron spokesman Mark Palmer did not return a Houston Press query. The Lay connection raises the question of why Rosenthal did not immediately recuse herself when the Enron case came to her court.