The president's message was that it's important to reduce "unnecessary lawsuits" and that federal securities regulators are in the best position to sue, said Al Hubbard, Bush's chief economic adviser and director of the National Economic Council.
Hubbard said deputy White House counsel Bill Kelley conveyed Bush's perspective to Solicitor General Paul Clement, who represents the government's views before the Supreme Court.
Hubbard said the president communicated his policy views, not specifically what he thought the solicitor general should do.
Bush's role in the case underscores its significance. The outcome of the Supreme Court case could determine whether investors can pursue lawsuits to recover investment losses if they can prove collusion between Wall Street institutions and scandal-ridden companies.
The deadline for siding with investors in the case ended at midnight Monday, and the solicitor general did not file a brief.
The administration will decide in the next 30 days whether to side with the defendant companies or not to participate in the case at all.
The Securities and Exchange Commission voted 3-2 to ask the solicitor general to support shareholders.
Damon Silvers, the AFL-CIO's associate general counsel, criticized Bush's action.
"The president decided that he thinks it's more important to protect his friends than it is to enforce the law," Silvers said.
The issue is whether shareholders can collect damages from investment banks, attorneys and accountants who are thought to have aided in fraud committed by their corporate clients.
The high court's ruling in the case could determine whether the Enron plaintiffs' separate $40 billion lawsuit against the investment banks — stalled by a federal appeals court ruling in March — can proceed.
Thirty state attorneys general sided with investors and referred to the Enron scandal 55 times in a 43-page court filing.