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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Patricia Trinchero who wrote (234)	1/15/2002 9:17:46 PM
From: stockman_scott	Read Replies (1) \| Respond to of 3602

SEC's Pitt slams talk of recusal in Enron probe Tuesday January 15, 8:13 pm Eastern Time By Kevin Drawbaugh WASHINGTON, Jan 15 (Reuters) - Securities and Exchange Commission Chairman Harvey Pitt on Tuesday dismissed suggestions on Capitol Hill that he may have to recuse himself from the commission's probe of fallen energy trader Enron Corp. (NYSE:ENE - news) due to old business ties with its auditor, Andersen. ``Talk about recusals misperceives how this agency operates. It is not the function of the chairman of the SEC, or any commissioner, to manage an investigation,'' said America's top markets cop in a written statement. ``If and when I am asked to do anything on this matter, I will follow both the letter and the spirit of the ethical requirements of this office. Any suggestion that I would do otherwise is an attempt to politicize the workings of an independent agency,'' Pitt said. Enron slid in just weeks from industry leadership to filing the largest bankruptcy in U.S. history on Dec. 2. Its stunning downfall threw thousands out of work, hammered investors and has stirred controversy from Wall Street to Washington. The Justice Department said last week it was pursuing a criminal probe of Enron. The Labor Department and six congressional committees are also investigating, in addition to the SEC probe. The chairman's role in the SEC's probe is being complicated by his links to Andersen, a Big Five accounting firm that he represented along with other firms when he was a private attorney in battles with the SEC over auditor independence. Asked about Pitt's role in the SEC probe, North Dakota Democratic Sen. Byron Dorgan said, ``It's obvious that with his previous work, he's going to need to recuse himself.'' Dorgan is chairman of the consumer affairs subcommittee, part of the Senate Commerce Committee which is scheduled to hold a public hearing on Feb. 4 on the Enron affair. Pitt is just the latest in a series of public officials who have recused themselves or been asked to recuse themselves from various probes related to Enron. Attorney General John Ashcroft last week removed himself from the Enron investigation after receiving campaign contributions from the fallen energy giant. A conservative government watchdog group, the National Legal and Policy Center, on Tuesday asked Democratic Sen. Joseph Lieberman to recuse himself from participating in a hearing scheduled for Feb. 4 into Enron by the Senate Governmental Affairs Committee because a fund-raising group founded by the Connecticut senator had received contributions from both Enron and Andersen. A Lieberman spokesman rejected the idea that he should step aside. In Houston, Texas Attorney General John Cornyn last week removed himself from the state's Enron probe, and the federal judge overseeing a host of shareholder lawsuits against Enron has also recused herself from the case. Pitt has had to step carefully in the SEC's Enron probe because of his ties to Andersen, sources said. In response to questions about his role, the SEC said last week: ``Chairman Pitt is following the terms of his ethics agreement that was provided to Congress and the government ethics office when he took office.'' Pitt took over at the SEC in August after working for 20 years in private practice and gaining a reputation as America's best securities lawyer. Andersen was one of scores of clients. It was virtually certain when he was nominated by President George W. Bush to lead the market-regulating SEC that he would face potential conflicts, said securities lawyers. Last summer, as the Senate was considering his nomination, Pitt pledged to distance himself for a year from SEC matters involving former clients. SEC probes are carried out by enforcement staff. Commission members, including the chairman, become involved twice -- once to vote on launching a formal investigation, and again at the probe's end on any staff request for enforcement action. The commission voted in October to authorize a formal probe of Enron. Pitt would normally have had to recuse himself from the vote, but sources said due to a shortage of commissioners, he did vote. He was allowed to do so under a government ethics rules loophole that waives recusal requirements under some circumstances with full disclosure.

To: Patricia Trinchero who wrote (234)	1/15/2002 10:51:52 PM
From: Lazarus_Long	Respond to of 3602

Enron is fully bloated. Not any more. What shocked me was that Enron was on the NYSE and not the Bulletin Boards. Why? At some point in the past they met the listing requirements. When it's all over they may still be trading with Pink Sheets. Unlikely. More like death by bankruptcy. If they're not already there, they will be when the suits are done. It is quite paramount that auditors become independent of management.Enron was paying Andersen several million dollars a year. That's alot of incentive to keep the contract lucid. What a grease job. No, this is the way business has been done to this point. Most of the time it has worked fine. Not always, though. It does seem a new method is needed to better ptotect stockholder interests.