WASHINGTON – Governmental Affairs Committee Chairman Joe Lieberman, D-Conn., and Permanent Subcommittee on Investigations (PSI) Chairman Carl Levin, D-Mich., said Wednesday an examination into the sudden implosion of the Enron Corporation would be a Committee priority in 2002.
Lieberman announced the full Committee would hold hearings January 24 into whether government agencies could have done more to protect the thousands of people and businesses hurt by the largest bankruptcy in American history. Senator Levin said he will subpoena documents from the Board of Directors of Enron, as well as top company officials, as part of PSI’s investigation into how Enron was governed and audited, and how it used offshore entities to conduct its business. PSI hearings are anticipated later in the year.
“The untimely and wholly unexpected failure of a corporate giant like Enron is an alarm call to all of us in government to make sure that we are doing all we can to protect the integrity of our markets and the savings and investments of the American people,” Lieberman said. “Today, 60 percent of the citizens of this country own stocks. The interest of those hardworking people in their investments and retirement plans is at the heart of the committee’s interest in Enron.”
“The collapse of Enron has enormous consequences for Enron stockholders and employees, the overall investing community, and the U.S. economy as a whole,” Levin said. “Thorough investigations are needed – and from different perspectives – to determine whether current law was violated and where current law is inadequate to protect the public interest. Our role in Congress is to understand what went wrong and why so we can make sure this does not happen again.”
Lieberman said the full committee will call experts on investing and regulation of the financial markets, energy and derivatives trading, and pensions and retirement savings to speak to the flaws in the system that allowed so many people to be victimized by Enron’s collapse. In the weeks and months that follow, Lieberman said, the committee will look at each of those problems in greater detail to see if cracks need to be filled in the regulatory system – including at the Securities and Exchange Commission, the Federal Energy Regulatory Commission, the Commodity Futures Trading Commission, and the Labor Department – that so many Americans fell through the day that Enron declared bankruptcy. Levin said PSI will spend the next few months gathering and analyzing the documentary trail of Enron’s collapse, with particular attention to the role of the Board of Directors in overseeing Enron activities; the role of the auditor, Arthur Andersen; and Enron’s use of related entities, limited partnerships and special purpose entities.
“The questions that need to be asked and answered about what happened to Enron are of great public – not partisan – interest,” Lieberman said. “That is the spirit in which we begin our Enron investigation and that is the spirit in which we intend to conduct it. This is a search for the truth, not a witch hunt, because the truth will enable us to take steps to prevent what happened to Enron, its employees, customers, and investors from happening again.”