As Congress gears up for hearings on Enron's $60 billion collapse, some Democrats are savoring a chance to investigate links between the company and its many G.O.P. friends in the White House and Congress. But the scandal may wind up tainting Democrats as well. Florida's state pension fund, which lost $325 million on Enron, is examining, as part of a broader inquiry, what role Frank Savage, a major Democratic donor, may have played in the state's loss. The fund's investments were directed by Alliance Capital Management, where Savage was a senior executive and chairman at the same time he sat on Enron's board.
State officials want to know whether he inappropriately pushed Enron's stock on the pension fund while the energy giant was failing. Alliance more than doubled the state's stake in Enron since last August, buying 5.6 million shares in three months, even as stock prices fell and analysts questioned the firm's management and accounting practices. Coleman Stipanovich, deputy executive administrator of the pension fund, said his staff would like to learn what Savage knew of Enron's internal problems and what, if anything, he passed on to fund managers at Alliance. "We're going to want to be satisfied there was no undue influence," he told TIME.
An Alliance spokesman said Savage, who headed an international subsidiary until leaving the firm in August, had no influence on Enron trading. Savage did not return calls for comment. Since joining Enron's heavily Republican board in 1999, he has donated $100,000 to Democrats and is raising money for New York gubernatorial candidate Carl McCall. Which proves, if nothing else, that Enron was a bipartisan debacle.
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