- WASHINGTON (Reuters) - Former Enron Corp. Chairman Kenneth Lay resigned
from the company's board on Monday, as two congressional committees vowed
to force him to come before their panels to testify on the energy giant's
collapse.
-
- But when one of the committees tried
to serve a subpoena on Lay, his attorney said he does not know where Lay
is and could not accept the subpoena, a spokeswoman for the House of Representatives
Financial Services Committee said.
-
- Lay had been scheduled to appear before
the panels on Monday, but pulled out the day before on the advice of his
attorney.
-
- As the congressional process went ahead
without Lay, Senate Commerce Committee Chairman Ernest Hollings, a South
Carolina Democrat, called for a special prosecutor to examine the energy
trading company's fall, saying he had no confidence in the Justice Department
probe.
-
- "We've got an Enron government,"
Hollings said at a news conference. "They got help from the secretary
of the Army, the secretary of treasury, go right on down, the secretary
of energy. They got help all last year trying to save them, at every turn,"
Hollings said.
-
- Hollings has scheduled a 9:30 a.m. (1430
GMT) meeting on Tuesday to discuss the issuance of a subpoena to force
Lay's appearance. The meeting will be open to the public.
-
- The Republican National Committee denounced
Hollings' comments as "blatant partisanship" and the White House
noted Enron had made campaign donations to both political parties. Bush
has denied helping Enron as it fell apart last year.
-
- On the other side of Capitol Hill, a
subcommittee of the House Financial Services Committee on Monday voted
unanimously to authorize Lay's subpoena and pledged to act on it at once.
-
- "We made contact with Mr. Lay's
attorney this afternoon ... He tells us he does not know of Lay's whereabouts,
which we find quite puzzling to say the least," said Peggy Peterson,
spokeswoman for the House Financial Services Committee.
-
- Earl Silbert, Lay's attorney, was unavailable
for comment. A woman answering the phone at his home said he was ill.
-
- The House panel also heard from William
Powers, the author of an internal Enron report released at the weekend,
that said the company deceived shareholders as executives raked in millions.
-
- "We found a systematic and pervasive
attempt by Enron's management to misrepresent the company's financial condition,"
Powers, dean of University of Texas Law School, said.
-
- In Houston, Dynegy Inc., which faces
a $10 billion Enron lawsuit over its withdrawal from a proposed merger
with its one-time rival, said the internal Enron report showed that the
bankrupt firm has only itself to blame for its demise.
-
- "The true causes of Enron's rapid
slide into bankruptcy were its own improprieties. Dynegy did not cause
Enron's bankruptcy," Dynegy said on Monday in a written response to
a lawsuit Enron filed on Dec. 2, claiming that Dynegy's withdrawal of the
merger triggered its downfall.
-
- LAY QUITS
-
- Also on Monday, Lay, who resigned as
Enron's CEO on Jan. 23, issued a statement in Houston saying he was also
stepping down from the board.
-
- "I want to see Enron survive and
successfully emerge from reorganization," Lay said. "Due to the
multiple inquiries and investigations, some of which are focused on me
personally, I believe that my involvement has become a distraction to achieving
this goal."
-
- Lay's testimony to Senate and House panels
had been expected to be a highlight of four days of hearings into the crumbling
of the one-time Wall Street darling, the largest company to file for bankruptcy
in U.S. history. But Lay canceled, with his lawyer citing a "prosecutorial"
atmosphere.
-
- Hollings said the Senate Commerce Committee
would meet on Tuesday to issue a subpoena to make Lay testify on Feb. 12.
-
- However, even if he appears, Lay can
invoke his right not to testify against himself, committee members said.
-
- With a criminal inquiry into Enron's
demise under way at the Justice Department and the Powers report of wildly
irregular accounting practices, an increasing number of witnesses are refusing
to testify before Congress.
-
- Ousted Enron Chief Financial Officer
Andrew Fastow and former Enron executive Michael Kopper are expected to
appear before a House Energy and Commerce Committee panel on Thursday but
to invoke their right not to testify against themselves.
-
- But former Enron Corp. CEO Jeffrey Skilling
still plans to testify, his spokeswoman said. He is slated to appear with
Fastow and Kopper on Thursday.
-
- SPECIAL PROSECUTOR
-
- Hollings however aimed his fire not so
much at Enron as at the Bush administration, and called for a special prosecutor
to investigate.
-
- While Attorney General John Ashcroft
had recused himself because of past Enron campaign donations, he handed
the probe to Deputy Attorney General Larry Thompson, who once worked for
a law firm that did work for Enron, Hollings said.
-
- The Justice Department rejected Hollings'
charges, saying a special prosecutor should only be appointed when prosecution
by the department would pose a conflict of interest.
-
- Illinois Republican Sen. Peter Fitzgerald
said he saw no evidence the Justice Department was not taking the probe
seriously.
-
- "I don't believe that anyone in
the Bush administration was aware that there was what appears to me to
have been a pyramid scheme going on in Enron Corporation," Fitzgerald
said.
-
- However, Hollings noted that Enron had
been a top contributor to Bush's political campaigns. White House Economic
Adviser Lawrence Lindsey and U.S. Trade Representative Robert Zoellick
had been Enron consultants, and Army Secretary Thomas White had been an
Enron executive, Hollings said.
-
- The Bush administration had crafted energy,
economic and tax policies that were favorable to the company, Hollings
continued. He said Vice President Dick Cheney had met Enron officials while
refusing to take calls from California's Democratic Sen. Dianne Feinstein
during the energy crisis.
-
- CASH AND CARRY
-
- "I've never seen a better example
of cash-and-carry government than this Bush administration and Enron,"
Hollings said.
-
- The Republican National Committee said
Hollings' charges were "unfortunate, blatant partisanship."
-
- Office of Management and Budget director
Mitchell Daniels noted that Enron had donated to both political parties.
-
- The Bush administration has acknowledged
contacts between Lay and top administration officials last year as Enron
found itself in increasing financial difficulty.
-
- But the president told reporters recently
that his cabinet's response to a collapsing Enron was: "No help here."
-
- But Hollings mocked this and compared
it to former President Bill Clinton's denial of sexual relations with White
House intern Monica Lewinsky. "To say no help here is like, 'I did
not have political relations with that man, Mr. Lay'." (additional
reporting by Kevin Drawbaugh)
|
