ELLE, W.Va. — Abruptly changing his tone about a company that contributed heavily to his political campaigns, President Bush said Tuesday that he was "outraged" that the Enron Corp. misled its employees and investors, including his mother-in-law, who he said lost more than $8,000 when its stock collapsed.
For the first time, Bush called for government action to force greater corporate disclosure of financial information.
In comments to reporters here before he toured a machinery shop, Bush also strongly defended how members of his Cabinet handled calls for aid from Enron's top executives, summarizing those members' message to the company's leaders as "no help here."
Bush's new tone came as the scope of the Enron investigation widened. The company told a federal court in Houston Tuesday that on Monday night it had discovered more shredded documents on the 19th floor of its headquarters in Houston, suggesting that employees were destroying potential evidence despite what the company's leaders say were orders to the contrary.
The shredded remains were turned over to the Justice Department Tuesday, and the Federal Bureau of Investigation sealed off part of the headquarters building.
Meanwhile, senior officials of the Arthur Andersen accounting firm were receiving subpoenas to compel them to testify to Congress about the massive destruction of Enron-related documents.
Subpoenas were going to Andersen chief executive Joseph Berardino, fired auditor David Duncan, attorney Nancy Temple and risk manager Michael Odom for their testimony at a House hearing Thursday.
"No one's getting a free pass on this one," Ken Johnson, spokesman for the House Energy and Commerce Committee, said Tuesday.
In a sprawling inquiry with both financial and political overtones, 11 House and Senate committees are investigating the Enron debacle, while the Justice Department and the Securities and Exchange Commission pursue their own less visible probes.
Enron's slide into the biggest bankruptcy in U.S. history on Dec. 2 left thousands of employees out of work and stripped of their retirement savings after Enron temporarily barred them from selling company stock from their Enron-dominated 401(k) accounts. Investors around the country were burned.
In Houston Tuesday, Enron's top security team — an in-house agency that protected executives and sniffed out employee misconduct — was leaving the company to form a private consulting firm.
An Enron spokesman said Tuesday the move was unrelated to the Enron problems.
The new firm, Secure Solutions International, will continue security work for Enron through a consulting contract, spokesman Vance Meyer said.
After Enron filed for bankruptcy, the security officers faced the possibility of being laid off and began to consider forming an independent firm, Meyer told the Houston Chronicle in Wednesday's editions.
Andre Le Gallo, a business intelligence consultant in California, said the former agents' switch to private consulting is not unusual in the security industry, especially in light of Enron's collapse.
"I'm sure they moved because they found better things to do than at a sinking firm," he said.
In his comments Tuesday, the president never mentioned Enron's chief executive, Kenneth L. Lay, a once-close friend whom he had nicknamed Kenny Boy and who was the largest single contributor to Bush's campaigns since Bush entered politics. Nonetheless, by implication the president cut the cord with Lay, saying, "What I'm outraged about is that shareholders and employees didn't know all the facts about Enron."
"My own mother-in-law bought stock last summer, and it's not worth anything now," he said of Jenna Welch, Laura Bush's mother.
Bush added later: "She didn't know all the facts. And a lot of shareholders didn't know all the facts. And that's wrong."
Republican strategists said Bush's changed tone reflected a political calculation by the White House as congressional hearings on the company's collapse begin this week. They said the administration was determined not to allow Democrats to portray Enron as a problem only for Republicans.
"The dynamic over Enron cannot be that Democrats are against Enron and for reform, and we're defending Enron and against reform," said one strategist who is close to the White House but who would not allow his name to be used. "What Enron did is outrageous, and if you don't move to correct it, it becomes an indictment of the free market. The Republican Party is the free market party. And we have to demonstrate our desire to make the market fair and to crack down on abuse."
Bill Dal Col, a Republican strategist, said Bush's comments were an appropriate response to the widening disclosures about Enron.
"When you've got a crisis that's growing like this — every time you turn the page there's a new chapter of hocus-pocus accounting — the stronger the outrage has to be," Dal Col said.
After Bush spoke, the White House corrected the president on the timing of his mother-in-law's investment. Welch bought 200 shares of Enron on Sept. 21, 1999, for $40.90 a share, the White House said, for a total investment of $8,180. She sold her holdings on Dec. 4, two days after the company declared bankruptcy, for 42 cents a share, meaning her investment had plummeted to $84.
The White House did not say if any other members of Bush's family had held Enron stock. Some of his close aides did, but they were forced to divest their holdings shortly after they joined the administration, under federal ethics rules.
Contributing: Associated Press