Bipartisan Outrage but Few Mea
Culpas in Capital
The New York Times
January 25, 2002
NEWS ANALYSIS
By DON VAN NATTA Jr.
W ASHINGTON, Jan. 25 -
The Enron
scandal has grown so large that it
took not one but two hearings on
Capitol Hill today for the
politicians to begin sorting
through the mess, while also
carefully sidestepping their own
role in it.
Anyone who tried to watch or
listen to both proceedings
simultaneously heard a
bipartisan chorus of outrage
about shredded documents and
empty retirement accounts.
"Enron robbed the bank. Arthur
Andersen provided the getaway
car, and they say you were at the
wheel," Representative James C.
Greenwood of Pennsylvania, the
Republican chairman of the
House Energy Committee's
subcommittee, told David B.
Duncan, the dismissed Arthur
Andersen partner who led the
accounting firm's audit of Enron
and who invoked his Fifth
Amendment right today against
self-incrimination.
Senator Richard J. Durbin, Democrat of Illinois, said:
"When the corporate insiders at Enron realized the ship
was sinking, they grabbed the lifeboats and left the
women and children, their workers and investors, to
drown."
While politicians were quick to blame Enron's accountants
for allowing the giant energy trading company to collapse,
few on either panel were prepared today to accept any
blame for the role Congress played.
The White House, meanwhile, once again insisted today
that the company's failure was a business scandal - not a
political one.
White House officials adopted the stance of outraged
victim and vengeful cop. "Nothing is going to stop the
president and this administration from pursuing justice,"
said Ari Fleischer, the White House spokesman.
Vice President Dick Cheney continues to refuse to release
a list of people who met with his energy task force last
year, even though more senators have called for its
release. Mary Matalin, a counselor to Mr. Cheney, said
today that the administration felt the list should be
withheld to protect the participants' privacy.
On Capitol Hill, some of the members posing the toughest
questions today had in earlier years voted for legislation
that deregulated commodities markets. They also blocked
several attempts to toughen accounting standards. Those
decisions helped make it easier for Enron to escape the
scrutiny of government regulators.
Several senators sitting on the Governmental Affairs
Committee, like Senator Robert G. Torricelli, Democrat of
New Jersey, pressured the Securities and Exchange
Commission in 2000 to abandon a proposed rule that
would have barred accounting firms from performing
auditing and consulting work for the same client, as
Andersen did for Enron. He was one of 13 senators who
intervened to quash the plan.
Yet Mr. Torricelli offered one of the day's only mea culpas.
Addressing Arthur Levitt Jr., the former chairman of the
Securities and Exchange Commission who had pushed for
the rule and testified today, Mr. Torricelli said: "We were
wrong. You were right."
Both at the White House and in Congress, the message is
simple: Punish those responsible for the Enron debacle,
and do everything possible to make sure another Enron
does not happen. There is not much appetite on either
end of Pennsylvania Avenue for the news media or the
public to dwell on any role the legislative or executive
branches may have played in creating an environment to
allow Enron to flourish.
"After all of the sound and fury of these investigations, the
bottom line questions are: Is Congress willing to amend
the law to rein in the greed of the next Enron?" Mr.
Durbin asked. "Are we willing to concede that the genius
of capitalism can result in ruthless behavior without our
oversight and the protection of law?"
Just as the White House has tried to avoid any political
fallout from the Enron debacle, members of Congress have
tried to escape any collateral damage from the scandal. So
the House Energy Committee resembled a bipartisan
corporate tribunal. Members acted as both prosecutors
and judges and the accused, Arthur Andersen L.L.P., was
left with almost no defense.
But many of the 11 House and Senate investigations into
the scandal plan not only on looking back, as was today's
chore, but also on trying to draft legislation that will
prevent another Enron. Whether that includes the
campaign financing laws that have helped give the public
the impression that many legislators have been tainted by
contributions from Enron or the accounting firms remains
to be seen.
"They are going to hit the easy targets first and hit the
easiest bad guys first," said Larry Noble of the Center for
Responsive Politics. "But they are going to have to deal
with the tougher questions, too, about their own role in
this."
Senator Joseph I. Lieberman of Connecticut, one
Democrat who has come under scrutiny for his role in
accounting legislation, has vowed his committee will
recommend changes in the law and regulations.
The inquiries are reminiscent of the role played by
Congress during the savings and loan crisis of the 1980's.
Some lawmakers touched by the scandal, most notably
Senator John McCain of Arizona - who took
contributions from Charles Keating, the operator of a
failed thrift, and spoke on his behalf - were deeply
affected by that experience and made campaign finance
overhaul a signature issue. Mr. McCain said of the Enron
scandal, "It's clear there is a taint out there on all of us."
As Mr. McCain's campaign finance bill regains momentum
on Capitol Hill, it is unclear whether the Enron debacle
will have a similar effect on House members and senators
who once sided with Enron and the accounting industry.
One candidate is Representative Billy Tauzin, the
Republican chairman of the House Committee on Energy
and Commerce. On July 20, 2000, in a letter co-signed by
20 House members, Mr. Tauzin opposed any toughening
of accounting rules. In the previous five years, Mr. Tauzin
had received nearly $150,000 from accounting firms.
As chairman of Congress's most aggressive committee
investigating Enron, Mr. Tauzin has hammered away at
the accounting profession.
His spokesman, Ken Johnson, said the case had changed
Mr. Tauzin's view of auditor independence. Two years ago,
Mr. Tauzin was convinced Mr. Levitt's plan was "a solution
to a problem that didn't exist," Mr. Johnson said. "Now we
know there's a problem. It's time to fix it."
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