Several Former Enron Execs Duck Testimony
By C. Bryson Hull
WASHINGTON (Reuters) - Lawmakers vowed on Thursday to get to the bottom of Enron Corp.'s collapse despite a number of former executives claiming their constitutional right to remain silent.
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``Reluctant witnesses will not keep us from getting at the truth,'' said Rep. James Greenwood, the Pennsylvania Republican who chairs the U.S. House Energy and Commerce subcommittee on oversight and investigations.
Lawmakers said a picture was emerging of falsified earnings and self-enrichment by company officers that preceded a Dec. 2 bankruptcy filing, the biggest in U.S. history.
``A simple story of old-fashioned theft,'' said Billy Tauzin, the Louisiana Republican who chairs the full House Energy and Commerce Committee, at the opening of what promised to be a day-long hearing into Enron's fall.
The U.S. Justice Department is conducting a criminal investigation into Enron's demise and the Securities and Exchange Commission is looking at possible violations of securities laws.
Unlike some of his colleagues, former Enron President and Chief Executive Officer Jeffrey Skilling was expected to testify, setting the stage for a battle with lawmakers who say company insiders gave him early warning of business troubles.
FASTOW SILENT
But former Enron Chief Financial Officer Andrew Fastow, the man accused of amassing millions for himself while running outside partnerships with the company that were instrumental in its demise, declined to testify.
Also exercising their Fifth Amendment rights to silence were Fastow protege and former Enron executive Michael Kopper, as well as Enron chief accounting officer Richard Causey and Enron chief risk officer Richard Buy, who are currently negotiating severance packages.
Former Enron Chairman Kenneth Lay backed out of testifying to Congress earlier this week. Lay was then subpoenaed by two committees to appear next week.
During one of nine hearings this week into Enron's collapse, members of Enron's board blamed management, auditor Andersen and the company's outside law firm, Vinson & Elkins, for keeping them in the dark.
Herbert Winokur, chairman of the Enron board's finance committee, testified that he was ``deeply disturbed'' by an internal report on Enron's problems by University of Texas Law School Dean William Powers.
``The report makes clear that those in management on whom we relied to tell us the truth did not do so. The outside experts at Arthur Andersen and at Vinson & Elkins failed us,'' Winokur said.
Tauzin, a lawmaker known for his tenacious questioning, has made clear Skilling will be in his sights.
SKILLING IN THE HOT SEAT
``Mr. Skilling, I understand, is anxious to come and testify. I understand he is very bright and thinks he can come over here and tell us all how wrong we are,'' Tauzin said on Wednesday.
The 48-year-old Harvard Business School graduate, long considered the financial wizard who engineered Enron's success, abruptly stepped down as CEO on Aug. 14, just six months after he took over from Lay, citing personal reasons.
Skilling has maintained he thought Enron was in excellent shape, and said he paid little attention to Enron's special partnerships, which he said were strictly the doing of Fastow.
But the Powers report, an internal company inquiry into Enron's collapse released on Saturday, upbraids Skilling for failing to exercise greater oversight of Enron's finances.
Skilling hardly ever signed the approval sheets for deals cut between Enron and the partnerships, the Powers report says. The board was told that Skilling, Causey and Buy would have to sign off on any such deals before they could go ahead.
Buy rejected the report's findings in testimony prepared for delivery to the House panel, describing them as ``wrong.''
``At least insofar as it pertains to me, that report is in several important respects wrong,'' said Buy, who added in his statement that he would refuse to answer committee questions.
Tauzin's committee has released a May 22 memo from Jordan Mintz, an Enron lawyer who hired outside counsel to review Fastow-related deals, asking Skilling if he would set aside time to sign all of the approval sheets he should have signed from the previous year. The Powers report says he hardly signed any at all.
Skilling also can expect to be questioned on why he did not bring former Treasurer Jeff McMahon's complaints about Fastow's deals to the attention of Lay and Enron's board.
McMahon, who is currently Enron president, argued back in 1999 that Fastow's deals were rife with accounting improprieties and should be more stringently controlled. He transferred to another division after Skilling rebuffed him.
McMahon, in remarks prepared for delivery at the hearing, said Enron could emerge from bankruptcy. ``I believe that Enron can emerge from bankruptcy by returning to its roots,'' he said. |
