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Hypocrite Hollings: Investigate Bush on Enron, but Not Dems

Monday, 04 February 2002 12:00 AM

Angered by the refusal of Lay to testify,

He failed to mention that Enron contributed to Sen. Joseph Lieberman, Sen. Charles Schumer and other Democrats, and he failed to call for any investigation of

The Justice Department said in a statement that it saw no reason to appoint a special counsel to investigate Enron. ``No person involved in pursuing this investigation has any conflict, or any ties that would require a recusal,'' the department said.

Before Senate Commerce or any other congressional panel can grill Lay, it will have to find him.

"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 of Representatives Financial Services Committee.

Earl Silbert, Lay's attorney, was unavailable for comment. A woman answering the phone at his home said he was ill, Reuters news agency reported Monday night.

Lay, 59, quit Enron's board Monday. He resigned as the company's chairman Jan. 23, after its filing for the country's biggest-ever bankruptcy on Dec. 2. Enron's meltdown destroyed pension funds of thousands of employees and others and sent the company's stock price tumbling.

Lay's testimony had been eagerly awaited in Washington, where the debacle of the high-flying Houston energy company has raised questions over whether management committed any crimes or improperly sought to influence the Bush administration's energy policy; the plans were scuttled Sunday evening when Lay decided against appearing.

In a letter to the Senate Commerce Committee, Lay's lawyer, Earl Silbert, said his client could "not be expected to participate in a proceeding in which conclusions have been reached before Mr. Lay has been given an opportunity to be heard."

Lawmakers, however, were not ready to take the new developments lying down, particularly members of the California delegation who have been pressing the Federal Energy Regulatory Commission to investigate whether Enron engaged in any illegal manipulation of the state's wholesale electricity market.

"I think he has to be subpoenaed," Rep. Henry Waxman, D-Calif., told Los Angeles radio station KNX Monday. "He had promised to come voluntarily and answer questions, but he said last night he wasn't going to come because he didn't like the statements on the Sunday news shows condemning his activity."

Sen. Barbara Boxer, D-Calif., told reporters that she suspected Enron's insistence that power prices not be capped during last year's electricity crisis might in part stem from the company's need to boost its cash flow at a time when its financial strength appeared superficially at least to be strong.

"In all that period, they were transferring billions of dollars out of California into the Enron Corporation and other corporations in that business," said Boxer. "It is our contention that in that period, Enron was kept afloat with these enormous profits. And while they were kept afloat, the insiders were unloading."

Calls for Lay to change his mind about testifying were also voiced on the Republican side of the aisle.

"Both Enron's entire senior management team and Arthur Andersen [Enron's auditors] owe the country a thorough explanation of the questionable business practices that destroyed this company," said Tom DeLay, the House GOP whip. "The sooner we have a full and open accounting of Enron's books, the better for all concerned."

The shock of Enron's collapse has given way to an increasingly adamant drive by Congress to find out what happened to the Houston energy giant and whether top executives illegally cooked the company's books to hide huge losses.

"It's not possible to find out what caused this ship to capsize unless you can interview the captain," Sen. Ron Wyden, D-Ore., told reporters.

There was speculation Monday that Lay might have bailed out of the hearings due to the Sunday release of a new internal Enron report that was critical of upper management, and Lay in particular.

The 218-page Powers report, submitted to the federal bankruptcy court Saturday night, disclosed several previously unknown allegations, including accusations that Enron was aided in its long list of failures by Andersen, which seemingly ignored auditing standards. Also, according to the report, lawyers appeared to fail their responsibilities.

Andersen reacted quickly to the report, authored by an outside director brought in by Enron to investigate, calling it an attempt "to shift blame to others."

Copyright 2002 by United Press International.

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Angered by the refusal of Lay to testify, He failed to mention that Enron contributed to Sen. Joseph Lieberman, Sen. Charles Schumer and other Democrats, and he failed to call for any investigation of The Justice Department said in a statement that it saw no reason...
Monday, 04 February 2002 12:00 AM
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