Congressional Panels to Probe Enron's Collapse (Update1)
By Jeff Bliss and Liz Skinner
Washington, Nov. 29 (Bloomberg) -- Senate and House committees will investigate the collapse of Enron Corp and consider new regulations for electricity and natural-gas trading.
Enron, the largest energy trader, is expected to file for Chapter 11 protection after the collapse of a planned merger with Dynegy Inc.
The House Energy Committee will hold hearings as early as next month to scrutinize the accounting practices and earnings reports of Enron, said Ken Johnson, a panel spokesman. The Senate Energy Committee may begin looking in January at more federal oversight of trading.
``When you have such a spectacular event as the collapse of a company that controlled 50 percent of the natural-gas and electricity trading, we're going to have some thoughts on that,'' said Bill Wicker, a spokesman for the Senate Energy Committee.
Enron's importance in energy trading and questions about its accounting practices require an investigation, said Senate Majority Leader Tom Daschle of South Dakota.
``I don't know that anybody knows yet just how this happened and how it happened so quickly,'' he told reporters on Capitol Hill. ``It raises some very serious questions.''
The unraveling of Enron, which is saddled with $15 billion in publicly held debt, began in October. Shareholders' equity was reduced by $1.2 billion because of the way the company accounted for outside partnerships it created. The announcement prompted lawsuits and an investigation by the U.S. Securities and Exchange Commission.
Enron's disintegration is a symptom of a wider problem with the government's supervision of companies, said Representative John Dingell, the senior Democrat on the House Energy Committee.
``There are likely other ticking time bombs out there with smoke-and-mirror earnings,'' the Michigan Democrat said. ``Our accounting and auditing system and its oversight are seriously broken and need immediate reform.'' |
