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Senate Panel Votes to Subpoena Former Enron Chairman - 2002-02-05


The U.S. Senate Commerce Committee has voted to subpoena the former chairman of the bankrupt Enron Corporation, Kenneth Lay, after he refused to voluntarily testify before the panel Monday. The committee is one of several investigating the collapse of the Texas-based company, the largest bankruptcy case in U.S. history.

The subpoena will require Mr. Lay to appear before the Senate committee next week.

But lawmakers, including Democratic Senator John Breaux of Louisiana, say Mr. Lay may refuse to testify by invoking his constitutionally-protected right to remain silent to avoid incriminating himself.

"I doubt that we are going to get the testimony of Ken Lay," he said. "I do not know that anybody on this committee believes he is going to come here and testify. But he is going to come here as a result of this subpoena. But, I bet you a dollar to a donut he doesn't testify, and invokes his right under the Fifth Amendment."

The House Financial Services Committee has also subpoenaed Mr. Lay to appear next week.

Mr. Lay's attorney has said his client declined to testify Monday because statements from some lawmakers suggested Mr. Lay would not get an impartial hearing.

Lawmakers have been reacting sharply to an Enron-authorized review of the company's collapse that was released Saturday. The report details how top company executives used complex business partnerships to hide big losses and debts from stockholders and employees. Many investors lost their life savings.

Lawmakers on the House Financial Services panel demanded Tuesday to know why Arthur Andersen, the firm that audited Enron, did nothing to warn the company about its financial health.

Joseph Berardino, the chief executive officer of Arthur Andersen, faced tough questioning from Congressmen, including Democrat Gary Ackerman of New York.

"You don't think you have a responsibility to blow the whistle?" he asked. "How do you let this happen, captain? Your ship is going to go down, and you are going to be lashed to the mast, until you start talking to us about what happened."

Mr. Berardino said Enron withheld information from Arthur Andersen. He said the panel that conducted the critical review of the company's collapse had no contact with his firm.

"The committee did not speak to people at Andersen," he said. "When the committee was formed we offered to assist it, but the company's lawyers indicated they were not ready to discuss anything with us."

Besides Congress, the Justice Department and the Securities and Exchange Commission are conducting their own probes of Enron's collapse.

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