Totally agree! Did you see Hollings today (see below)~ I got so mad I wanted to go slap his face through the TV screen....What a bombastic grandstander...
Former-chief Lay quits Enron as lawmakers threaten subpoena
WASHINGTON (CNN) -- Former Enron chief Kenneth Lay announced Monday that he
was severing his remaining ties with the company, as angry lawmakers
prepared to subpoena him to appear before at least one congressional
committee.
Lay resigned from his seat on the Enron board of directors Monday, cutting
all links with the troubled energy giant apart from his stock ownership. He
stepped down as the company's chairman and chief executive officer last
month after serving in the post for 16 years.
Earlier Monday, Lay abruptly decided not to testify before a Senate
subcommittee looking into the energy company's collapse.
U.S. Sen. Ernest "Fritz" Hollings, D-South Carolina, chairman of the Senate
Commerce, Science and Transportation Committee, announced Monday that he
would convene the committee Tuesday to "get authority" to subpoena Lay.
Hollings said the subpoena would demand Lay's appearance before a Senate
subcommittee for February 12.
"There's a culture of government corruption," Hollings said, offering some
of the harshest comments yet directed at the Bush administration. "I've
never seen a better example of cash-and-carry government than this Bush
administration and Enron."
The senator, who has a reputation for offering intemperate comments, cited a
host of Bush administration officials who had contacts with Enron, but he
did not offer any evidence of wrongdoing. President Bush has maintained
Enron never received any favorable treatment from his administration.
Hollings said Attorney General John Ashcroft was "Enron's man" and called
for a special prosecutor to investigate the Enron matter. Ashcroft, citing
past campaign donations, has already recused himself from the Enron probe.
The Justice Department issued a statement rejecting Hollings' call for a
special counsel, saying "no conflict of interest exists."
The White House on Monday dismissed Hollings accusations of administration
wrongdoing.
"It's disappointing some are more interested in reading off partisan,
Democrat attack memos and repeating unfounded and unsubstantiated
allegations than working with the president to prevent something like this
from happening in the future," the statement said.
"The president will continue to press for pension and disclosure reform to
protect workers' retirement savings."
Appearing at the same press conference with Hollings, U.S. Sen. Peter
Fitzgerald, R-Illinois, said the Enron matter was a "corporate" scandal,
adding that Democrats and Republicans had received Enron campaign
contributions. Hollings also acknowledged that he had received contributions
from Enron.
In the wake of Lay's decision not to testify, a Senate Commerce subcommittee
hearing planned for Monday was canceled, but the House Financial Services
Committee proceeded with an afternoon subcommittee hearing.
U.S. Rep. Richard Baker, R-Louisiana, chairman of the capital markets
subcommittee, said he would seek a subpoena for Lay if the subcommittee
determines his testimony is needed later. Baker opened the House hearing by
citing a "crises of confidence" created by Enron's spectacular downfall.
At that hearing, Harvey Pitts, chairman of the Securities and Exchange
Commission, told lawmakers that "a better system of corporate disclosure and
financial reporting" is needed as well as new rules to ensure the
independence of auditors.
Lay's decision not to testify before Congress came after the weekend release
of the Powers report, an internal Enron review named for William Powers Jr.,
who led the investigation. That report claims that Enron executives reaped
millions of dollars from off-the-books partnerships while the energy company
violated basic rules of accounting and ethics.
On Sunday afternoon, Lay's attorney, Earl Silbert, sent a letter to
Hollings, saying that "inflammatory statements" made on Sunday talk shows
indicate that some lawmakers already have made up their minds and that the
congressional hearings will have a "prosecutorial" tone.
But senators said Lay should not have been surprised that their hearing
likely would have been tough.
"There's a lot that went wrong here, and I think the public would be served
by hearing Mr. Lay's description of what happened and how it happened and
who is responsible," said U.S. Sen. Byron Dorgan, D-North Dakota, chairman
of the Senate Commerce subcommittee that was to hear from Lay.
"Mr. Lay in my judgment was looking for a door to get out of this testimony
because of the Powers report and I understand that," Dorgan said. "I'm
disappointed by it."
Dorgan said that Lay can be compelled to appear but not to speak.
"He could certainly assert his Fifth Amendment rights, but we'll have a
meeting later [Monday] to talk about that. There is subpoena power here. The
issue of criminal liability is something the Justice Department will
evaluate, not us."
U.S. Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services
Committee, and ranking committee member, U.S. Rep. John J. LaFalce, D-New
York, issued a joint statement in response to Lay's decision not to appear.
"Until [Sunday night], we were expecting Mr. Ken Lay, former CEO of Enron.
However, at the last minute, we have been notified that Mr. Lay does not
intend to appear," the statement said. "We sought his testimony in good
faith, and until [Sunday night] he had agreed to provide it. We are
extremely disappointed that Mr. Lay has broken his commitment to our
committee."
Lay's attorney, Silbert, also sent a letter to Oxley, House Finance Services
Committee chairman. Lay also had been scheduled to testify in a hearing
before that committee's capital markets subcommittee.
"As of [Sunday] morning, Mr. Lay intended to testify [Monday]," Silbert
wrote. "In the midst of our preparation, particularly disturbing statements
have been made by members of Congress. He cannot be expected to participate
in a proceeding in which conclusions have been reached before Mr. Lay has
been given the opportunity to be heard."
The letter said Lay was pulling out of the hearings with the "greatest
reluctance and regret."
In addition to Pitt, the House subcommittee is scheduled to hear testimony
from Powers. On Tuesday, Arthur Andersen CEO Joseph Berardino is scheduled
to make his second appearance before the subcommittee
Powers also is scheduled to testify this week before the House Energy and
Commerce Committee.
While some other Enron officials decided to exercise their Fifth Amendment
right not to testify, Lay agreed nearly a month ago to appear voluntarily on
Capitol Hill to answer questions about Enron despite ongoing criminal
investigations into the collapse of the Houston, Texas-based energy trading
company.
"Mr. Lay firmly rejects any allegations that he engaged in wrongful or
criminal conduct," Silbert said in his letters to Hollings and Oxley. "He
did, and still does, believe that the most appropriate place to explore
these allegations and related policy issues was before the Congress."
U.S. Rep. Henry Waxman, D-California, a member of the House Energy and
Commerce Committee, told CNN's "Late Edition With Wolf Blitzer" that
congressional testimony may shed more light on Enron's questionable
partnerships.
"There are many, many partnerships created that became the basis for
siphoning funds out of the corporation," Waxman said. "It's a way that the
insiders were able to loot that corporation and rob the employees and the
investors of their financial security."
-- CNN Congressional Correspondent Jonathan Karl contributed to this report.
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