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Saturday, Oct 11, 2008
Grab your popcorn and your legal pads. Congress is set to kick off hours and hours of Enron hearings.
Jan 24, 2002 | When Enron CEO Kenneth Lay spurned an invitation last month from the House Financial Service Committee to testify about the collapse of the company, committee chairman Rep. Michael Oxley, R-Ohio, issued an ominous warning.
"We're disappointed," he said at the time. "But this is the first in a series of hearings and investigations that the committee will be conducting. So, as Arnold Schwarzenegger says, 'We'll be back.'"
Right Oxley was. On Thursday, Congress kicks off Enron-a-rama with two hearings, one held by the House Energy and Commerce Committee, chaired by Rep. W.J. "Billy" Tauzin, R-La., the other by the Senate Governmental Affairs Committee, chaired by Sen. Joseph Lieberman, D-Conn. It's just the beginning of what congressional sources say may become a sort of Iran-Contra scandal of the financial world, with conflicting hearings, massive egos, the blinding glare of television klieg lights, and a long, tedious search for smoking gun after smoking gun.
At least seven congressional committees and subcommittees plan to hold hearings on one aspect or another of Enron's collapse, in addition to investigations by separate federal agencies. Asked on Wednesday if it would make sense to consolidate some of these congressional investigations, Senate Majority Leader Tom Daschle, D-S.D., demurred. "I think initially, because each committee of jurisdiction has a very legitimate right to look into this, it's pretty hard to say to one committee, 'You can't do this.' That's what these committees are designed to do," Daschle said: investigate. "So I'd much rather get all the facts than worry about some convenience for witnesses or others who may be called to testify," he added.
Tauzin and friends will likely be listening to fired Arthur Andersen LLP partner David Duncan invoke his Fifth Amendment right against self-incrimination. Tauzin's committee will also hold hearings on Jan. 29 and 30.
Lieberman and Co. will explore the shell partnerships established by Enron and blessed by auditor/consultant accounting firm Arthur Andersen. "We'll attempt to put the Enron story in a context," says committee spokeswoman Leslie Phillips. "We'll try to identify a number of policy issues that might come into question as a result of Enron's collapse. We'll be looking at it within a context of, for instance, what could the regulatory agencies have done?"
Tauzin's committee has perhaps been the most aggressive in pursuing the matter publicly; it was Tauzin who released the letter from Sherron Watkins, the Enron executive who raised serious concerns about Enron's shell partnerships in a letter to CEO Lay in which she complained about being "incredibly nervous that we will implode in a wave of accounting scandals ... the business world will consider the past successes as nothing but an elaborate accounting hoax."
No one in the House has benefited from Arthur Andersen's largesse more than Tauzin, who has received more than $57,000 in campaign contributions from the firm, which has also been implicated in the scandal. Whether despite or because of this previously cozy relationship, Tauzin has made a big show of slamming Andersen, revealing its celebrated shred-a-thons and demanding more information from managing partner and CEO Joseph F. Berardino.
Tauzin will be joined on stage by his co-star, Rep. John D. Dingell, D-Mich., the ranking Democrat on the Energy and Commerce Committee (and the House's number 10 recipient of Enron cash). In supporting roles are Reps. Jim Greenwood, R-Penn., chair of the committee's subcommittee on oversight and investigations, and Peter Deutsch, D-Florida, that subcommittee's ranking Democrat.
For his part, Lieberman is dealing with last week's revelation that his friend and Senate chief of staff from 1989 to 1992, Michael Lewan, is now an Enron lobbyist who tried unsuccessfully to set up a meeting between Lay and Lieberman. Lewan met three times with Lieberman staffers to discuss Enron-related matters, but never discussed the issue with the unsuccessful vice presidential candidate, a Lieberman spokesman insisted.
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