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Probes by Congress losing steam

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.

In early September, the committee asked the U.S. Justice Department to begin a criminal investigation into whether Stewart, the domestic design tycoon, lied to committee investigators trying to determine if she received inside information before selling her ImClone stock.

Lawyers at the Securities and Exchange Commission recently told Stewart that they are ready to file civil securities-fraud charges against her in the insider-trading scandal.

On the other side of Capitol Hill, staffers from the Senate Governmental Affairs Committee still are going through about 2,500 pages of Enron-related documents subpoenaed from the White House and Vice President Dick Cheney's offices.

Under an agreement with the White House, only a limited number of staff have access to the locked room fitted with an alarm where they are kept.

When President Bush was governor of Texas, former Enron Chairman Kenneth L. Lay repeatedly wrote to him seeking support for legislation benefiting the energy-trading company, but no instance has been found so far of Enron officials asking anyone in the White House for help before Enron's bankruptcy filing last December, administration officials have said.

The Senate Commerce Committee's subcommittee on consumer affairs focused its investigation on the role of Enron and other energy-trading companies in California's energy crisis.

Lawmakers have accused the companies of driving up electricity prices, particularly in California, by manipulating power supplies in 2000 and 2001.

"We've certainly uncovered a substantial amount of evidence," said Sen. Byron Dorgan, D-N.D., the subcommittee chairman. "I think we've lit the fuse here."

The Justice Department now is pursuing an investigation of the companies' activities, and an inquiry by the Federal Energy Regulatory Commission recently found evidence of price manipulation and deceit by Enron, which earned tens of millions of dollars from the deals.

Congress enacted, and Bush signed into law, the landmark crackdown on corporate and accounting malfeasance.

Enron-inspired legislation to tighten protections on employee 401(k) plans was passed by the House but has yet to clear the Senate.

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