By Marcy Gordon The Associated Press

October 29, 2002
WASHINGTON - Hot television lights beamed on disgraced corporate executives summoned to testify before Congress.

They raised their right hands, invoked their Fifth Amendment privileges and, one by one, refused to answer questions in packed hearing rooms.

Those who did talk pointed fingers. Responsibility, they said, rested elsewhere.

The stock market, meanwhile, dropped like a stone, spooking small investors whose anguish grew as they watched their retirement savings plummet.

Congress, mindful that members faced elections in November, moved this past summer to pass the most sweeping crackdown on business fraud since the post-Depression era, tightening regulation of companies' financial reporting and providing new oversight of independent auditors.

Now the political impetus that sparked no less than a dozen separate congressional inquiries into Enron Corp.'s stunning collapse is fading nationally.

Still, the issue of corporate scandals reverberates in individual races around the country.

In North Carolina, for example, a Democratic advertisement said Republican Senate candidate Elizabeth Dole attended a "secret fund-raiser hosted by Kenneth Lay, the chairman of Enron," after promising to put her campaign on hold in the days after the Sept. 11 attacks.

In Colorado, Republican Sen. Wayne Allard and Democrat Tom Strickland have criticized one another over their respective ties to Qwest Communications Inc. and Global Crossing Inc., two companies also under investigation for financial irregularities.

And in Texas, Enron's home base, debates between the Senate candidates have been livened by accusations about ties to the failed energy giant, which is based in Houston.

So what more was produced by hours of testimony and the mountains of documents obtained by lawmakers on Enron, WorldCom Inc., Global Crossing, Martha Stewart's sale of her ImClone Systems Inc. stock and more?

The House Energy and Commerce Committee started early in the year with Enron and its longtime auditor, the Chicago-based Arthur Andersen LLP, and later moved into Global Crossing, Qwest and ImClone.

The panel in January sent investigators to Andersen's Houston office in search of documents -- a move that the committee says led the accounting firm's public acknowledgment that its employees had shredded thousands of Enron audit documents.

"Andersen suddenly got religion when our investigators turned up at their doorstep," said Ken Johnson, spokesman for committee chairman Rep. Billy Tauzin, R-La.

Andersen was convicted of obstruction of justice for destroying Enron documents. The star witness against the accounting firm was David Duncan, the firm's senior Enron auditor, who refused to give public answers to questions from Congress but talked to committee investigators.

He eventually pleaded guilty to obstruction of justice.

Andrew S. Fastow, Enron's former chief financial officer, was charged in a criminal complaint this fall with fraud and conspiracy.

When he was called before the committee early in the year, he exercised his constitutional right against self-incrimination and refused to answer questions.

Most recently, the House committee heard testimony from Global Crossing Chairman Gary Winnick, who sold $734 million in company stock before the fiber-optic giant sought bankruptcy protection in January.

Winnick, trying to stem criticism that he cashed in while company employees lost their retirement savings, pledged to the panel that he would donate $25 million of his own money to employees' 401(k) plans.