I just found out their att'y has filed to move the case from NY to Texas, now I really wonder why they want to do that!
Congress Probes Enron Downfall
Business/Economy
Source: AP
Published: Wednesday December 12 8:17 AM ET Author: MARCY GORDON
Posted on 12/12/01 6:41 AM Pacific by boston_liberty
WASHINGTON (AP) - Congress is investigating the collapse of Enron Corp., whose swift downfall left countless investors burned, thousands of employees out of work with decimated retirement savings and the once high-flying company in federal bankruptcy court.
The huge energy-trading company has declined to send any officials to a hearing by two House panels. And investigators for another committee are trying to locate Enron's former chief financial officer, the lead architect of complex partnerships that are under government scrutiny.
Amid the company's strife, nearly 600 employees deemed critical to its operations received more than $100 million in bonuses last month as Enron faced a merger that unraveled and then bankruptcy.
Wednesday's hearing by two panels of the House Financial Services Committee was designed to help Congress and the public ``understand as best we can what structurally went wrong, what mistakes were made and what mistakes were not noticed,´´ Committee Chairman Rep. Michael Oxley, R-Ohio, said Tuesday.
Subjects being examined include the Houston-based company's accounting practices, potential securities law violations and Enron's handling of its employees' 401(k) retirement investment plans, Oxley said.
Joseph Berardino, chief executive of the accounting firm Arthur Andersen LLP, which was Enron's longtime auditor, and Robert Herdman, chief accountant of the Securities and Exchange Commission, were testifying as requested by the lawmakers.
The SEC is examining Enron's use of questionable partnerships that allowed the company to keep some $500 million in debt off its books, and has issued subpoenas to Andersen related to its auditing of Enron's accounts. Enron, which only months ago was the nation's seventh-biggest in revenue, has acknowledged that it overstated profits for four years.
Absent from the hearing was Enron Chairman and Chief Executive Kenneth Lay, who had been asked to appear by the lawmakers.
``I don´t think they want to, or are not prepared to answer some very pointed questions about what went wrong,´´ Oxley said.
Enron spokeswoman Karen Denne said neither Lay nor any other Enron officials were testifying because ``we don´t believe we would be able to adequately serve the interest of the committee while at the same time trying to serve the interest of our creditors, shareholders and our current and former employees.´´
Lay, who built the world's largest energy trader by buying electricity from generators and selling it to consumers, is no stranger to Washington. He is a friend of President Bush and one of his largest campaign contributors, donating $250,000 to the Republican Party during Bush's run for president and raising at least $100,000 for Bush from other donors.
Lay was among the executives who met privately with Vice President Dick Cheney as his task force formulated an energy plan last spring.
The House Energy and Commerce Committee, which is conducting its own probe, has given Enron's former chief financial officer, Andrew Fastow, until Dec. 21 to meet with committee investigators or face a subpoena to testify at a hearing. ``Quite simply, he cannot be found,´´ said Ken Johnson, a spokesman for Rep. Billy Tauzin, R-La., the panel´s chairman. ``We are troubled by his unresponsiveness.´´
Committee investigators sent a letter to Fastow's attorney in Houston. A Fastow lawyer recently denied rumors that his client had left the country, saying Fastow is in the United States, though he rarely appears in public because he and his family have received death threats since his ouster from Enron in October.
Enron filed for bankruptcy protection from creditors on Dec. 2, following a six-week downward spiral, and also filed a $10 billion lawsuit against smaller rival Dynegy Inc. for scrapping a proposed buyout. In addition to the SEC probe, Enron also is under investigation by the Justice Department.
The Labor Department is looking into Enron's handling of its employees' retirement benefit plans. Before filing its bankruptcy petition, Enron prohibited its workers for several weeks from selling stock held in voluntary retirement plans while the share price plunged. Worth more than $80 a year ago, Enron's stock has tumbled to less than a dollar a share