Every time you turn on the news, somebody is testifying about Enron before a congressional committee. What exactly are all these committees investigating?
At last count, three House committees and seven Senate committees were conducting Enron probes, with each declaring a special legislative interest—finance, banking, energy, pensions, etc.—in the company’s collapse. The committees are:
House Committee on Financial Services: Focusing on the Enron collapse’s effect on investors and financial markets, including potential securities fraud. Do disclosure laws or accounting standards need to be changed? This committee held Congress’ first Enron hearing, on Dec. 12. It’s one of the committees that departed Enron CEO Ken Lay has been dodging. He’s been subpoenaed to appear Thursday, Feb. 14.
House Committee on Energy and Commerce: Sometimes referred to as the “House Energy Committee” and sometimes referred to as the “House Commerce Committee,” its investigation centers on Enron’s accounting practices and what effect the company’s bankruptcy may have on electricity and natural gas markets. Chairman Billy Tauzin, R-La., has been getting lots of TV time, as has Rep. James Greenwood, R-Pa., chairman of its oversight and investigations subcommittee. Former Enron CEO Jeffrey Skilling testified before this committee on Thursday.
House Committee on Education and the Work Force: Focusing on the Enron bankruptcy’s implications for retirement security and pension plans, especially with regard to the Employee and Retirement Income Security Act of 1974. ERISA is the federal law that governs employee pension and benefit plans.
Senate Committee on Governmental Affairs: Joe Lieberman’s committee. It has divided its investigation in two: The full committee will examine, in Lieberman’s words, “whether agencies of the federal government—including, for example, the Securities and Exchange Commission, the Federal Energy Regulatory Commission, the Commodity Futures Trading Commission or the Department of Labor—could have done more to protect the enormous number of people and businesses that were hurt when Enron imploded.” The Permanent Subcommittee on Investigations, chaired by Sen. Carl Levin, D-Mich., is conducting a broader investigation, paying special attention to Arthur Andersen, Enron’s board of directors, and Enron’s use of offshore tax havens.
Senate Committee on the Judiciary: Held a hearing Wednesday that focused primarily on possible changes to liability laws, such as making it easier to sue accountants and law firms that participate in similar scandals in the future.
Senate Committee on Health, Education, Labor, and Pensions: Ted Kennedy’s committee. Looking at pension law and how Enron handled its 401k plan.
Senate Committee on Banking, Housing, and Urban Affairs: Usually known by its shorthand name, the Senate Banking Committee. Phil Gramm, whose wife sat on Enron’s board of directors, is the ranking Republican on this committee. Three hearings are scheduled this month, mostly to examine accounting standards.
Senate Committee on Commerce, Science, and Transportation: The Senate Commerce Committee is concentrating on the bankruptcy’s impact on consumers: whether employees and investors were given false or inaccurate information regarding the value of Enron’s stock. But the committee’s jurisdiction over interstate commerce is rather broad, so its investigation may become rather broad as well. Ken Lay has been subpoenaed to testify Tuesday, Feb. 12.
Senate Committee on Energy and Natural Resources: Examining the Enron bankruptcy’s effect on energy markets, especially pricing and capacity.
Senate Committee on Finance: Reviewing Enron’s corporate income tax returns to see if the company masked its financial condition by using tax shelters.
In addition to these congressional committees, Enron is being investigated by the Justice Department (for possible violations of criminal law), the Securities and Exchange Commission (accounting and audit practices), the Labor Department (Enron’s 401k plan), and the Federal Energy Regulatory Commission (whether Enron manipulated energy prices). Plus, a variety of civil suits have been filed by former Enron employees and investors.
