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Enron's chief says he's leaving
Compiled from Times wires Kenneth L. Lay, the embattled chairman and chief executive officer of Enron Corp., is resigning from the bankrupt energy company. "This was a decision the board and I reached in cooperation with our creditors' committee," Lay said in a statement that Enron released Wednesday night in Houston. "I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company and preserving value for our creditors and hard-working employees." Lay said the many inquiries and investigations into Enron's activities take up too much of his time. He resigned on the eve of two congressional hearings into the corporation's collapse. The chairman of a House subcommittee holding a hearing today said Wednesday that as many as 80 people who worked at Arthur Andersen's Houston office were involved in the destruction of documents related to the Enron Corp. Rep. James C. Greenwood, R-Pa., chairman of the House Energy and Commerce oversight subcommittee, said investigators for the subcommittee had determined that document shredding was widespread, calling into question Andersen's attempts to blame the episode on rogue employees. At that hearing, Enron's lead outside auditor will refuse to testify about his role in the destruction of financial documents, his lawyer said. With the committee nonetheless compelling the Arthur Andersen auditor, David Duncan, to show up at its hearing, Congress' public inquiry into the shredding of documents headed for a dramatic opening. In the Senate, Joseph Lieberman, D-Conn., has summoned former Securities and Exchange Commission chairman Arthur Levitt Jr. and other witnesses to testify about financial and regulatory issues. They will appear before the Government Affairs Committee, of which Lieberman is chairman. In Houston, Enron said its board, working with the creditors' committee on Enron's bankruptcy, is selecting a restructuring specialist to join Enron to help with its efforts to emerge from bankruptcy. The specialist will serve as acting chief executive officer. Just months ago, Enron was the country's seventh-biggest company in revenue. But investors and traders alike evaporated amid revelations of questionable partnerships that helped keep billions of dollars in debt off its books and the company's acknowledgment that it overstated profits for four years. The company filed for bankruptcy in December, leaving thousands of employees out of work and stripping much of their retirement savings after Enron temporarily barred them from selling company stock from their Enron-dominated 401(k) accounts. Investors around the country were burned. Lay is expected to testify before two congressional committees on Feb. 4. On Wednesday, the House Energy and Commerce Committee served a subpoena on Duncan. But one of his attorneys, Robert Giuffra, told the committee in a letter that "he will rely on his constitutional right not to testify" unless the panel grants him immunity. Congress can compel witnesses to show up but cannot force them to answer potentially incriminating questions without granting them immunity from criminal prosecution. Duncan already has talked to committee investigators. Andersen, a Chicago-based auditing firm, fired Duncan last week for his role in the extensive destruction of Enron-related documents that took place after federal regulators began investigating possible accounting improprieties. But Rep. Greenwood expressed skepticism about that account. "Do you believe that 80 Andersen employees were directed by Duncan to violate an express provision of policy by Andersen in the face of yet another investigation, and none of them picked up the phone and called their superiors and said, "This doesn't seem right'?" he said. "The question we need to get to is, were there instructions from above, and what was the purpose of sending e-mails reminding staff of the document destruction and retention policy." The New York Times reported that an unnamed person authorized to speak for Andersen on Wednesday night repeated the firm's assertion that Duncan's actions, aided by other partners in the Houston office who were demoted or placed on leave last week, were not sanctioned by the firm. Duncan's lawyer took issue with the committee's insistence that Duncan come to Washington for the public hearing. "Mr. Duncan should not be punished for exercising his constitutional rights," Giuffra wrote, citing instances during the investigations of Watergate, Iran-Contra and Whitewater in which witnesses invoking the Fifth Amendment were not compelled to appear. "Making somebody take the Fifth in public is really not what Congress should be about because it has the effect of embarrassing somebody publicly for exercising their constitutional rights," agreed Joseph diGenova, a counsel to committees in the House and Senate for eight years and a U.S. attorney for five years in the Reagan administration. Committee spokesman Ken Johnson, while acknowledging Duncan's constitutional right, said he "has knowledge of events that are material to our investigation" and therefore must appear. "We take this investigation very seriously and we're not going to give anyone a free pass," he said. Granting immunity is not being considered because the committee doesn't want to impede the Justice Department's investigation, Johnson said. Subpoenas also were served Wednesday on Andersen attorney Nancy Temple and risk manager Michael Odom for their testimony at today's hearing. The committee had planned to subpoena Andersen chief executive officer Joseph Berardino. But Andersen spokesman Patrick Dorton said the firm planned to send Dorsey Baskin, an expert on auditing standards. Also Wednesday, attorneys seeking to bar Andersen from shredding any more documents related to its audits of Enron submitted their plans to a federal judge in Houston. U.S. District Judge Melinda Harmon did not immediately issue a decision. One plan to prevent further document shredding was drawn up by lawyers for shareholders suing 29 current and former Enron executives and board members. The plaintiffs include Amalgamated Bank, the University of California Regents and pension funds for Georgia, Ohio and other states. Pension funds for Florida and New York City also are plaintiffs, but their attorneys did not sign off on the plaintiffs' plan. Senators: White House may provide panel recordsWASHINGTON -- Three Senate committee chairmen Wednesday called for the release of White House records detailing the development of President Bush's energy policy, and Republican Senate leaders signaled that the administration would back down from its nine-month refusal to provide the records. In a letter Wednesday, the chairmen expressed their support for the investigative arm of Congress, the General Accounting Office, to pursue its efforts to obtain meeting records of the White House energy task force, which was led by Vice President Dick Cheney and produced Bush's energy policy. The letter, to U.S. Comptroller General David Walker, who heads the GAO, escalates a bid by Congress to discover whether executives from Enron Corp. and other energy companies influenced the task force's recommendations. Army secretary says Enron failure cost himWASHINGTON -- Army Secretary Thomas White, a former top Enron executive, said Wednesday he suffered "significant personal losses" in the company's bankruptcy but still collected $12.1-million when forced to sell his holdings after taking office. Responding to an inquiry from Rep. Henry Waxman, White said that while he had several conversations with friends at Enron in past weeks, none, including Lay, asked him to intervene with the Bush administration or anyone else on Enron's behalf. The financial disclosure statement White filed when Bush nominated him as Army secretary showed White holding stock and stock options that at the time were valued in the broad range of $56-million to $130-million. That means he may have lost anywhere from roughly $44-million to $118-million. White did not put a dollar amount on his losses. -- Information from the Associated Press, Washington Post and New York Times was used in this report.
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