On the Hill, Probes Reach Double Digits
By Susan Schmidt
Washington Post Staff Writer
Thursday, January 17, 2002; Page A10
Enron Corp.'s collapse has spawned a world of questions. And for every one, it seems, there's a restive congressional committee that can't get answers fast enough.
Were Enron stockholders swindled? Its employees defrauded? Were regulators deceived? Did accountants at Arthur Andersen LLP knowingly create a false picture of company health?
At least 10 House and Senate committees are going through documents and scheduling hearings to investigate the biggest bankruptcy in U.S. history. That's on top of investigations underway at the Department of Justice, the Securities and Exchange Commission, the Labor Department and the Internal Revenue Service.
The number of probes continued to mushroom yesterday, with the Senate Finance Committee announcing it will look into whether Enron used tax shelters to mask its financial condition. With so many committees weighing in, investigative overlap seems inevitable. But consolidating Congress's efforts may be impossible.
"These committees are fiefdoms with what they say are different jurisdictions and purposes," said Stanley Brand, former counsel to the House of Representative and a defense lawyer who has represented many targets of congressional probes. "You are really dealing with committee chairmen who jealously guard their prerogatives."
Sen. Carl Levin (D-Mich.), a key Enron investigator, said Congress's zeal is warranted.
"There's plenty to investigate, let me tell you," Levin told reporters. "The problem here is not going to be duplication. The problem here is whether we can get all of the web that was cast here, spun here."
Levin's investigative subcommittee of the Senate Governmental Affairs Committee is looking into actions of Enron's executives and accountants. The full committee, chaired by Sen. Joseph I. Lieberman (D-Conn.), will look at how well the regulators monitored Enron.
The agencies include the SEC, the Federal Energy Regulatory Commission and the Commodity Futures Trading Commission.
The Senate commerce committee is focusing on Enron's refusal to let employees sell or transfer company stock as the stock price plummeted last fall. That panel expects Enron Chairman Kenneth L. Lay to testify Feb. 4. It also has invited Jeffrey K. Skilling and Andrew S. Fastow, two former company principals involved in creating partnerships that helped disguise the magnitude of Enron's debt.
The Senate banking committee has slated a hearing next month with former SEC officials to discuss accounting practices at regulated companies.
On the House side, the Energy and Commerce Committee is covering ground similar to that examined by Levin's subcommittee. The House panel is proudly aggressive.
"We were the first committee in Congress to announce an investigation, we were the first committee to launch an investigation," said Ken Johnson, spokesman for House Energy and Commerce. "Our investigators have been to Houston twice and are going back tomorrow."
Yesterday, the committee's investigators interviewed Andersen's lead Enron auditor, David B. Duncan, who was fired on Tuesday. Other committees are rushing to interview principals as well.
Some lawyers say the many investigations could complicate the Justice Department's criminal probe. Officials from Enron and Andersen, for example, may refuse to testify before Congress unless they are promised that their testimony won't be used against them in a criminal case. Such promises can make the Justice Department's task more difficult.
"Some of the key players have broached us with the idea of immunity," Johnson said. "So far, we haven't promised it to anyone."
While the committee plans to "seek every opportunity to get to the truth," he said, grants of immunity are rare and are usually worked out with the Justice Department's cooperation.
"We are very mindful of what is going on in Congress," a Justice Department spokesman said yesterday. "Congress has its job and we have our job. If it becomes an issue, we will address it, but it has not become an issue yet."
Giving immunized testimony to Congress effectively can arm a witness later against criminal charges. Prosecutors would have the difficult task of showing a court that they had incriminating evidence before the witness disclosed it in an immunized forum.
Such problems were vividly illustrated during the Iran-contra arms investigation. The conviction of Oliver North, a military aide to the National Security Council, was set aside -- and that of his boss, John Poindexter, was thrown out -- because of concerns that trial witnesses had been influenced by hearing congressional testimony.
Defense lawyers worry, too. Robert Bennett, who is representing Enron, complains that the competing congressional committees will become a political circus.
Multiple congressional appearances can be perilous for witnesses. With each appearance, a witness runs the risk of contradicting himself, and thus exposing himself to charges of perjury or false statements, Brand said. "You could be mortally wounded in committee," he said.
Staffers at the House Financial Services Committee, which is looking into the accounting and securities fraud issues, said they are getting regular briefings from SEC civil enforcement investigators and, unlike others in Congress, are taking care not to interfere with that probe or the criminal investigation at Justice.
"We are not the prosecutors or criminal investigators, and a lot of people get that all mixed up," said Peggy Peterson, spokeswoman for the committee.
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