Sinister developments at Enron, former CFO Andrew Fastow is missing...(twilight zone music plays in the background)
Dec. 12, 2001, 12:17AM
Panel seeks reams of Enron records
Fastow 'nowhere to be found'
By LAURA GOLDBERG
Copyright 2001 Houston Chronicle
A U.S. House committee investigating Enron Corp. said Tuesday it requested a raft of records from the company and was unable to find former Chief Financial Officer Andrew Fastow.
The House Energy and Commerce Committee on Tuesday released letters sent to Enron and Fastow, even as Ken Lay, Enron's chief executive officer, declined a separate congressional request to testify at a hearing today.
Also Tuesday, Texas Attorney General John Cornyn said the state had joined others in requesting that the judge in Enron's bankruptcy case move the proceeding from New York to Houston.
Cornyn also said he formed a task force to get a handle on the amounts Enron owes various state agencies. For example, the General Land Office, which oversees state properties including those with oil and gas reserves, is owed $1.2 million by Enron for selling it natural gas.
"It's my job to make sure that the state's financial interests are protected in this bankruptcy," Cornyn said. "Obviously it's had a tremendous impact on the lives of many Texans."
Enron's former CFO Andrew Fastow "nowhere to be found."
Enron filed for Chapter 11 bankruptcy protection last week and has since laid off about 4,500 workers in the United States, with most of the cuts in Houston.
A pair of subcommittees of the House Financial Services Committee is scheduled to hear from four witnesses at its hearing today dubbed "The Enron Collapse: Impact on Investors and Financial Markets."
Slated to appear are Robert Herdman, chief accountant of the Securities and Exchange Commission, which is investigating Enron; Joseph Berardino, chief executive of Andersen, Enron's auditor; Richard Trumka, secretary-treasurer of the AFL-CIO; and Charles Hill, director of research at Thomson Financial/First Call, which tracks earning estimates and ratings made by Wall Street analysts.
Lay was asked to appear, but Enron declined to send any officials, a committee spokeswoman said, adding that the committee has no immediate plans to subpoena Lay but is keeping the option open.
MORE ON ENRON
• J.P. Morgan Chase & Co. one of Enron Corp.'s biggest creditors, on Tuesday sued the troubled energy trader for more than $2.1 billion.
• Enron Japan Corp., a wholly owned subsidiary of Enron Corp., said Tuesday it and its three Japanese affiliates have filed for bankruptcy.
• California power regulators decided Tuesday to probe how Enron Corp.'s bankruptcy could affect its customers in California.
Enron didn't believe it "could serve the committee's needs to their satisfaction," while preparing for a creditors' meeting scheduled for today and for other bankruptcy-related issues, an Enron spokesman said.
The hearing, among other issues, will focus on accounting irregularities at Enron and why it was forced to restate earnings back to 1997, as well as issues related its 401(k) plan.
The House Energy and Commerce Committee is also investigating Enron. Tuesday it released a letter sent to Lay on Monday and a Friday letter sent to Fastow in care of his Houston attorney.
The letter to Fastow, Enron's chief financial officer until his ouster in late October, requested that he agree to an interview with committee staff members no later than Dec. 21. It also asked for a variety of records, including those related to a series of financial vehicles critics charge allowed Enron to hide losses and other financial problems.
Two of the financial vehicles they cited, LJM Cayman and LJM2 Co-Investment, were investment partnerships that did business deals with Enron even as Fastow, while still chief financial officer at Enron, ran them.
"Quite simply, he is nowhere to be found," Ken Johnson, a spokesman for the Energy and Commerce Committee, said of Fastow. "We are troubled by his unresponsiveness so far.
"Our letter puts Mr. Fastow on notice. If he does not voluntarily agree to meet with our investigators, then the next step would be to subpoena him to appear at a hearing before our committee."
In contrast, both Enron officials have cooperated with the investigators, Johnson said.
Among other items on the list:
• Minutes from all Enron board meetings back to 1997, along with minutes from the board's Audit and Compliance Committee from the same time.
• A list of current or former Enron executives who worked at Andersen before joining Enron.
• All records of proposed adjustments back to 1997 by Enron's auditors, financial officers or accounting staff that were never made in its financial statements.
• Records related to sales of Enron stock by Enron employees, officers and board members.
The committee also requested meetings by Dec. 21 with three Enron executives and members of the board's audit and compliance committee. The Enron spokesman said he expected Enron lawyers to respond to the committee's requests.
In Texas, Cornyn's office was working to tabulate the state's exposure to Enron. Officials found that Enron owes at least $125,000 in taxes and said it was unknown whether Enron would pay state employment taxes due for the fourth quarter of this year.
Houston Chronicle reporter David Ivanovich in Washington contributed to this story. |
