Thomas E. White

Thomas E. White (Born 1943 in Detroit, Michigan) is an American businessman and former U.S. Army officer who served as senior executive at the now collapsed Enron and a scandal ridden term as the United States Secretary of the Army for which he was nominated by U.S. President George W. Bush.

Contents

1 Military Career and Education 2 Business Career and Enron Scandal 3 Government Career and Other Scandals 4 References

Military Career and Education

In 1967 White graduated from West Point United States Military Academy and was commissioned in the U.S. Army. In 1974 he received a degree in Operations Research from the Naval Postgraduate School, Monterey, California. In 1984, he attended the United States Army War College, Carlisle, Pennsylvania.

During a long military career that included two tours of duty in Vietnam he served in a variety of capacities including;

• Commander, 1st Squadron, 11th Armored Cavalry Regiment
• Commander, 11th Armored Cavalry Regiment, V Corps
• Director, Armor/Anti-Armor Special Task Force

In 1989 White was appointed executive assistant to the then chairman of the Joint Chiefs of Staff General Colin Powell, where he was described in The Washington Post by a mutual friend as Powell’s “alter ego” in “a job that requires tremendous political sophistication.” In July, 1990 White retired from the army with the rank of Brigadier General.

Business Career and Enron Scandal

In 1990 White entered the private sector as Vice Chairman of Enron Energy Services (E.E.S.), a subsidiary of the Enron Corporation responsible for providing energy outsource solutions (or not as the case may be). According to his original Department of Defense biography White was responsible for the delivery component of energy management services, which included;

• Commodity management
• Purchasing, maintaining and operating energy assets
• Developing and implementing energy information services
• Capital management
• Facilities management.

He was responsible for the Enron Engineering and Construction Company, which managed an extensive construction portfolio with domestic and international projects. White also served as a member of Enron's Executive Committee and was Chairman and Chief Executive Officer for Enron Operations Corporation. Although as reported in the Village Voice after the Enron scandal broke this long-drawn-out two-paragraph original exposition in his official Department of Defense biography was surreptitiously cut-down to the single line “From 1990 to 2001, Mr. White was employed by Enron Corporation and held various senior executive positions”.

One reason for this change was suggested on the B.B.C. after it was later alleged that E.E.S. played a part in the rigging of California's electricity market, which resulted in the 2000-2001 California electricity crisis and gained tens of millions of dollars profit for the firm. President of consumer interest group Public Citizen, Joan Claybrook stated that "we believe that Thomas White tried to portray himself as an individual who was not involved in energy trading. He kept saying he just dealt with the retail side." Another possible reason was suggested by the L.A. Times when it reported that E.E.S. was “criticized for accounting practices in which the division counted future contracts as profits rather than waiting until the services were delivered” and according to the New York Times in February 2001 when White learned of millions in further losses, his e-mailed response summed up the whole strategy: "Close a bigger deal. Hide the loss before the 1Q." It was reported that these “unusual accounting practices contributed to the parent company's collapse.”

As reported in the L.A. Times White left Enron in May 2001 with declared ownership of $25 to $50 million in Enron stock, $25 to $50 million in stock options, a ‘phantom’ stock award (a future bonus of appreciated stock) of $5 to $25 million, an employee stock ownership plan worth $1 to $5 million and a retirement account worth $100,000 to $250,000. This was more than any other senior official, but he promised the Senate confirmation hearing that he would divest himself of all interest before taking up his next role.

Government Career and Other Scandals

White was a controversial choice for Government service despite his long military service due to his most recent appointment at the Enron Corporation. Critics such as William D. Hartung, Head of the Arms Trade Resource Center, felt that it was inappropriate to appoint businessmen to key positions that could benefit their former companies. U.S. Secretary of Defense Donald Rumsfield however had decided to make corporate experience one of the key requirements in his appointees as was reported in the Washington Times. This policy lead to White’s admission to the Pentagon alongside other leading businessmen including James Roche and Gordon R. England. In White’s case much of this criticism would later prove true.

White was sworn in on May 31, 2001 as 18th Secretary of the Army and was responsible for all matters relating to Army manpower, personnel, reserve affairs, installations, environmental issues, weapons systems and equipment acquisition, communications, and financial management. He lead a work-force of over one million active duty, National Guard and Army Reserve soldiers and 270,000 civilian employees, he had stewardship over 15 million acres (60,000 km²) of land and an annual budget of nearly $70 billion. White was almost immediately embroiled in scandal.

As reported in the New York Times while serving as Vice Chairman of Enron Energy Services White had actively pursued military contracts for the company and in 1999 had secured a prototype deal at Fort Hamilton for privatising the power supply of army bases. Enron had been the only bidder for this deal after White had controversially used his government and military contacts to secure key concessions. USA Today reports that in his first speech just “two weeks after he became secretary of the Army, he vowed to speed up the awarding of such contracts” this was despite the fact that he still held a considerable interest in Enron. A Pentagon spokeswoman responded by suggestions of a possible conflict of interests by saying that “Defense Secretary Donald Rumsfeld sees no conflict and has complete confidence in the Army secretary”.

On the September 20, 2001 in the build-up to the U.S. Invasion of Afghanistan White announced to a press conference that the deployment order signed by Defense Secretary Donald Rumsfeld included army as well as air force troops and that they were ready for "sustained land combat operations". This operation would result in many U.S. Army casualties but White had far more pressing concerns. As reported in the Washington Post in late October following a flurry of calls and meeting with senior Enron executives White unloaded 200,000 Enron shares for $12 million shortly after this Enron went into collapse. The L.A. Times reported White in brief conversations with Rumsfeld in November and Powell in December, the focus of which were "a concern on their part for the impact that the bankruptcy of Enron may have had on my personal well-being. My response in both cases was that I had suffered significant personal losses but that I would persevere."

As reported in the New York Times in late January 2002 Rep. Henry Waxman requested a meeting with White regarding the military contracts and the irregularities with the accounting at E.E.S. stating “you are in a unique position because you are the person in government who has the most intimate knowledge of Enron”. Furthermore the Washington Post reported that at this time White still held interests in Enron, including a claim on 50,000 stock options and an annuity paid by the company, despite having promised to divest himself at his confirmation hearing 8 months. This earned him a rebuke from Sens. Carl Levin (D-Mich.) and John Warner (R-Va.) of the Senate Armed Services Committee. He then went on to get himself accused in the Washington Post of Misuse of Government Property by allegedly using military jets for personal trips for him and his wife. Enron however refused to go away and in July following the breaking of the company’s involvement in the 2000-2001 California electricity crisis White found himself denying everything under oath before the Senate Commerce Committee.

As reported by the New York Times “Dick Cheney vehemently denies that talk of war, just weeks before the midterm elections, is designed to divert attention from other matters”. President of Public Citizen, Joan Claybrook however stated to the B.B.C. that she believes “the Bush administration is using the whole issue of Iraq as a smokescreen to cover corporate sleaze. The corporate crime wave was dominating the newspapers and on television and they had to change the subject. The only option was war. It has sucked all the air out of the media and so it has trumped all these other issues.” As planning for the 2003 Invasion of Iraq progressed however the divisions between White and the rest of the administration were exacerbated.

As reported on Ananova trouble began when Defense Secretary Donald Rumsfeld decided to cancel the $11 billion Crusader system. This was 42-ton self-propelled howitzer that was too big to be carried by any of the military’s cargo planes. Deputy Defense Secretary Paul Wolfowitz and Undersecretary of Defense Pete Aldridge met with White and gave him 30 days to come up with a plan to terminate the Crusader. White instead allegedly lobbied Congress to approve further funding for the project. Pentagon chief spokeswoman Victoria Clarke said, ”Rumsfeld expected army leaders to get fully behind the decision to eliminate the Crusader program but instead was confronted with comments and ‘talking points’ sent to members of Congress aimed at undercutting the move”. Rumsfield opened a probe into the incident as Clarke stated, "Obviously we take these things very, very seriously". When asked whether Rumsfeld still had full confidence in White, Clarke replied, "He has confidence they will get to the bottom of this." Adding "Those who are responsible for any inappropriate behaviour, if we discover that, they will be held accountable". White resigned on April 25, 2003 and President of Public Citizen, Joan Claybrook stated “While Public Citizen applauds White’s resignation, we lament this administration’s ethical laxity in appointing him to the job and allowing him to keep it for so long.”

Following his departure White co-authored a book called “Reconstructing Eden” in which he continued to criticise the administration saying of its plan for the 2003 Invasion of Iraq that, "it is quite clear in the immediate aftermath of hostilities that the plan for winning the peace is totally inadequate. Clearly the view that the war to 'liberate' Iraq would instantly produce a pro-United States citizenry ready for economic ad political rebirth ignored harsh realities on the ground."

References

• John Hendren “Army Secretary Takes On Afghan, Enron Wars (http://www.commondreams.org/headlines02/0126-02.htm)” January 26, 2002, Los Angeles Times
• Russ Kick "The Incredible Shrinking Résumé of Thomas White (http://www.villagevoice.com/issues/0221/kick.php)" Village Voice
• Jayson Blair “U.S. Checking Enron Deal at Ft. Hamilton (http://www.nytimes.com/2002/03/10/business/10BID.html)” March 10, 2002, New York Times
• Laurence McQuillan “Ex-Enron official speeds Army's energy deals White's push to privatize isn't a conflict, Pentagon says (http://www.usatoday.com/usatonline/20020121/3789436s.htm)” USA Today
• REUTERS “Rep. Waxman Wants to Quiz Army Boss About Enron (http://www.nytimes.com/reuters/politics/politics-enron-congress-army.html)” February 1, 2002, New York Times
• “Washington Post: The Army Secretary's Business (http://www.washingtonpost.com/wp-dyn/articles/A28658-2002Mar27.html)” March 28, 2002, Washington Post
• “Army Chief Faces Enron Questions (http://www.cbsnews.com/stories/2002/07/22/politics/main515789.shtml)” July 18, 2002, CBSNews.com
• Paul Krugman “Cronies in Arms (http://www.commondreams.org/views02/0917-04.htm)” September 17, 2002 in the New York Times
• "Biography Comparison (http://www.thememoryhole.org/white-bio.htm) The Memory Hole

Preceded by: Joseph W. Westphal (acting)

United States Secretary of the Army May 2001–May 2003

Succeeded by: Les Brownlee (acting) Template:End box