Congressional panel turns heat on Enron

Fallen energy giant Enron Corp. faced further scrutiny on Capitol Hill on Wednesday with another committee announcing a probe of the company's collapse, possibly looking at connections between Enron and the White House.

The Senate Governmental Affairs Committee's permanent subcommittee on investigations said it will subpoena documents next week and scheduled a hearing into the matter for Jan. 24.

"Enron's unexpected collapse raises some troubling questions that the governmental affairs committee will be asking," said Sen. Joseph Lieberman, the Connecticut Democrat who chairs the full committee.

A Wall Street darling just a few months ago, Enron on Dec. 2 made the largest bankruptcy court filing in US history after a rescue takeover by rival Dynegy Inc. fell apart amid investor concerns about Enron's murky finances.

Houston, Texas-based Enron is now under investigation in Washington by the market-regulating Securities and Exchange Commission, the departments of Justice and Labor and at least five congressional committees.

In response to questioning at a briefing, Lieberman said he would not rule out the committee looking into ties between Enron and the administration of President George W. Bush.

"It's a matter of public record that executives of Enron had close relationships with people who are now in the Bush administration. They also had close relations with some Democrats," Lieberman said.

Several of Enron's top executives were major backers of Bush's election campaign, as well as those of other Washington politicians.

Enron Chairman Kenneth Lay "and others played an active role in the formulation of energy policy by the Bush administration," Lieberman said.

"We've got to ask whether the advice rendered was at all self-serving," he said. "There are some interconnections here with the Bush administration but that is not the focus of this investigation."

Sen. Carl Levin, the Michigan Democrat who chairs the permanent subcommittee, said the investigation would focus on the role of Enron's directors in the collapse, the accounting firm Andersen in its audit of Enron's financial statements, and the company's use of complex financial partnerships.

Once ranked No. 7 on the Fortune 500 list of top companies, Enron's stock was trading up 4 cents, or 6.7 percent, at 64 cents a share on the New York Stock Exchange in early afternoon trading on Wednesday, off from an August 2000 high of $90.56.

Thousands of Enron employees lost their jobs and much of their savings. A 401(k) retirement plan that made many of them heavily dependent on company stock came under fire at a congressional hearing last month when employees said they were unable to sell their holdings when the stock price plunged.

"I'm particularly concerned with reports that top executives at Enron were selling their shares of company stock at very high profits while lower-level employees were forbidden from selling theirs," said Sen. Susan Collins, a Maine Republican and ranking minority member of the permanent subcommittee.

The Wall Street Journal, citing internal company documents, reported on Wednesday that top Enron officials knew about financial partnerships involved in the company's downfall and were aware of possible conflicts of interest.

"Something was very rotten in the state of Enron," Levin said, adding that his subcommittee would look into what appeared to be "layer upon layer of conflicts of interest."

Lieberman said no decision had been made on whether to subpoena Lay or other Enron executives. Asked whether SEC Chairman Harvey Pitt would be called before the committee, he said, "We will be calling Mr Pitt."

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