Enron's Lay Drops Congress Hearing

Sun Feb 3, 5:57 PM ET

By PETE YOST, Associated Press Writer

WASHINGTON (AP) - Former Enron chairman Kenneth Lay pulled out of this week's scheduled congressional testimony on Sunday, with his lawyer saying that hearings have taken on a "prosecutorial" tone.

"I have instructed Mr. Lay to withdraw his prior acceptance of your invitation," Lay attorney Earl Silbert said in letters to the Senate and House panels that were to hear from him Monday.

"He cannot be expected to participate in a proceeding in which conclusions have been reached before Mr. Lay has been given an opportunity to be heard," Silbert added.

In the letters, Silbert cited remarks on Sunday talk shows by various members of Congress suggesting there was rampant criminality at Enron.

"These inflammatory statements show that judgments have been reached and the tenor of the hearing will be prosecutorial," wrote Silbert.

"Mr. Lay firmly rejected any allegations that he engaged in wrongful or criminal conduct," the attorney wrote Democratic Sen. Ernest Hollings of South Carolina and Republican Rep. Michael Oxley of Ohio. Hollings chairs the Senate Commerce Committee; Oxley the House Financial Services Committee.

Appearing Sunday on NBC's "Today" show and on MSNBC, Sen. Peter Fitzgerald, R-Ill., said that "Ken Lay obviously had to know that this was a giant pyramid scheme — a giant shell game."

Sen. Byron Dorgan, D-N.D., called Enron "almost a culture of corporate corruption." Rep. Billy Tauzin, R-La., asked whether "maybe somebody ought to go to the pokey for this."

"These are a few example, from among many others," wrote Lay's attorney, detailing quotes from the TV interviews in the letter declining to testify.

Silbert said the Enron chairman "cannot be expected to participate in a proceeding in which conclusions have been reached before Mr. Lay has been given an opportunity to be heard."

Lay's decision came amid a new, internal review of Enron, which disclosed that in at least two cases, key documents could not be found that would show which top executives signed their names to controversial deals that brought about the company's downfall.

"We're finding what may clearly end up being securities fraud," said Tauzin. "Fraudulent, phony attempts" may have been made to move debt out of the company "in violation of current accounting practices."

Tauzin said "we found instances where some employees were invited in on the deals ... for a small investment of $6,000. ... Six weeks later ... that $6,000 investment became $1 million."

Dorgan said that in one failed deal, an Enron partnership named Braveheart borrowed $110 million from a Canadian bank and the company booked the money as income.

"They were doing almost no business, but they manufacture income from a bank loan," said Dorgan, who appeared with Tauzin on NBC's "Meet the Press."

"That's the kind of thing that went on over and over and over again. We want to know what Ken Lay knew."

Dorgan, D-N.D., was to preside at a Senate Commerce Committee hearing Monday where Lay is scheduled to testify. Tauzin's panel plans three Enron hearings this week.

An internal probe of Enron led by University of Texas law school dean William Powers stated that a key document was missing from a partnership deal. Lay says he was unaware of the transaction and former Enron chief executive officer Jeff Skilling says he was unaware of the terms.

"We have not located any Enron Deal Approval Sheet, `DASH,' an internal document summarizing the transaction and showing required approvals," stated the report. The report noted the same type of situation in another transaction as well, and the report raised the possibility that no approval sheet was ever prepared.

Tauzin said that Skilling backed away from signing his name to off-the-books partnership deals.

"What does that say about his knowledge of whether these deals were honest or corrupt?" Tauzin said.

"We found out that one of the good guys ... went to Skilling and brought him all these deals to get his signature on it," Tauzin said. "He refused to sign it."

Citing a company rife with conflicts of interest, Tauzin said that in one deal, a man and his girlfriend at Enron actually negotiated with each other.

"They were really sweethearts, ended up getting married," said Tauzin. "When they signed the deals, they signed as married partners, one against the other."

Dorgan said the question of criminality is "a judgment for the U.S. Justice Department" to make, but he added that "$1 billion in profit was booked here that didn't exist. That's trouble."

On CNN's "Late Edition," Reps. Jim Greenwood and Henry Waxman argued over the political dimensions to the Enron controversy.

"I hate to see this turned into a political scandal," said Greenwood, R-Pa., chairman of the House Energy and Commerce oversight and investigations subcommittee. Powers is to testify Tuesday before the panel.

Waxman, ranking Democrat on the House Government Reform Committee, said hundreds of thousands of dollars in Enron donations to Republicans and Democrats over the years had resulted in weakened regulatory oversight of the company.

"Those who stopped the police" from looking at Enron "bear some responsibility as well," said Waxman.

-- (coward corporate criminal @ refuses. to tell truth), February 03, 2002

Answers

I had a feeling he would chicken out, given that the PR campaign with his wimpering, lying wife did not go over as well as he had hoped. He must be the lowest lifeform on the planet, to send his stupid wife in front of the cameras to lie for him, and then not even have the balls to face the music himself.

-- Subpoena the scumbag (then @ hang. him), February 03, 2002.

Monday February 4 1:22 PM ET

Senate Panel Plans to Subpoena Enron's Lay

WASHINGTON (Reuters) - The Senate Commerce Committee on Monday said it planned to subpoena former Enron Corp. Chairman and Chief Executive Officer Kenneth Lay to appear before the panel after the former chief of the collapsed energy giant canceled voluntary testimony.

Senior members of the Senate panel said the full committee would meet on Tuesday ``to authorize the issuance of a subpoena to compel former Enron CEO Kenneth Lay to testify before the committee.''

Lay on Sunday abruptly canceled testimony before the Senate panel on Monday and another appearance Tuesday before a House financial services subcommittee. A lawyer for Lay cited the increasingly ``prosecutorial'' attitude of lawmakers in making the decision.

Another former Enron executive, Jeffrey Skilling, still plans to testify before a congressional committee later this week, his spokeswoman said on Monday.

``Mr. Skilling plans to testify,'' Judy Leon, his spokeswoman, said. When asked if he would invoke his constitutional right not to testify when he appears before a House panel on Thursday, she said ``No.''

Skilling resigned as president and chief executive from Enron on Aug. 14, 2001, citing personal reasons.

Skilling, along with former Enron Chief Financial Officer Andrew Fastow and Chief Accounting Officer Richard Causey, are scheduled to go before the House Energy and Commerce subcommittee on oversight and investigations on Thursday.

Rep. Billy Tauzin, chairman of the full Energy and Commerce Committee, said on Sunday he expected Fastow and another former Enron executive, Michael Kopper, to invoke their Fifth Amendment rights not to testify at the hearing.

Former Enron Chairman Kenneth Lay abruptly canceled his planned appearances before a Senate Commerce subcommittee on Monday and House Financial Services hearing on Tuesday because of what his lawyer described as a prosecutorial atmosphere in Congress.

That decision also followed the release of a damaging report over the weekend by a special committee of Enron's board of directors that blasted Lay for his lack of oversight.

-- Judge Wopner (your cell @ is. ready), February 04, 2002.

Monday February 4 6:41 PM ET

Ex-CEO Lay Says Resigns From Enron Board

HOUSTON (Reuters) - Former Enron Corp. (ENRNQ.PK) Chairman and Chief Executive Officer Kenneth Lay resigned from the collapsed company's board of directors on Monday, the day a Senate panel said it would subpoena him to appear before Congress.

``I want to see Enron survive and successfully emerge from reorganization,'' Lay said in a statement. ``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.''

The resignation is effective immediately.

The announcement comes just one day after he abruptly pulled out of his planned appearance before Congress to answer questions about the collapse of the energy giant he helped found and left in disgrace.

Lay, 59, relinquished the top posts at Enron on Jan. 23 , under pressure from the board and creditors in the company's record Chapter 11 bankruptcy, but retained his seat on the board.

One of President Bush (news - web sites)'s biggest financial backers, Lay had been scheduled to give testimony before the Senate Commerce Committee on Monday, in what was expected to be the starting highlight of a jam-packed week of Enron-related hearings.

However, he pulled out Sunday night, after his lawyer, Earl Silbert, advised him not to appear because of what Silbert perceived as an increasingly prosecutorial tone from lawmakers investigating Enron's rapid fall.

-- lol (the smartest thing @ he's done. yet!), February 04, 2002.