Ex-Enron Executive to Address Probe
Ex-Enron Executive to Address Probe
Feb. 06, 2002
HOUSTON (AP) _ It's risky business for Jeff Skilling, the Enron Corp. chief executive who quit before the company imploded in a storm of alleged accounting abuses, to appear before Congress with no guarantees of immunity.
``Jeff Skilling is playing very high-stakes poker here,'' Todd Zywicki, a law professor at George Mason University, said Wednesday in anticipation of Skilling's testimony Thursday about Enron's collapse before a congressional committee.
``It's very risky strategy for a CEO to say he didn't know what was going on. You're expected to inform yourself as to what is going on, so one would expect that there will not be that much information forthcoming,'' he said.
An internal investigation into Enron's accounting said Skilling, former chairman and CEO Kenneth Lay and the company's directors failed in their oversight duties while former Chief Financial Officer Andrew Fastow and others enriched themselves with shady partnerships that damaged the once-mighty energy giant.
Skilling is scheduled to discuss findings in that report before the House Energy and Commerce Committee along with Fastow and Michael Kopper, a former Fastow employee.
The report harshly criticized Fastow and Kopper for creating or running the partnerships and earning millions of dollars from them. Lawyers for Fastow and Kopper say they intend to invoke their Fifth Amendment right against self-incrimination and decline to answer questions.
Judy Leon, a spokeswoman for Skilling, said Wednesday that he wouldn't invoke the 5th Amendment during his testimony.
Others scheduled to appear include Robert Jaedicke, an Enron director who served on the board's audit committee; current Chief Accounting Officer Rick Causey; and current Chief Risk Officer Rick Buy.
An official close to the company said the board intended this week to place Causey and Buy on administrative leave because the internal report said they, along with Skilling, failed to rigorously control how the partnerships operated. Both already have been interviewed by investigators for the committee.
Kenneth Lay, former chairman and CEO, backed out of voluntary testimony before two committees on Monday. He has since been subpoenaed to appear Feb. 12 and Feb. 14.
Former employees who must wait until next week to hear from Lay say they hope Skilling and others help explain why the company plummeted so swiftly, leaving them jobless.
``I would just like to hear their stories,'' said Donna Muniz, a former Web designer for Enron and one of thousands laid off after the company filed its massive bankruptcy on Dec. 2.
``I don't want to hear a lot of pointing fingers,'' she said. ``I just want them to tell basically what they feel happened and let other people decide who's fault it is.''
Rod Jordan, co-chairman of the Severed Enron Employees Coalition, said the main thing he wants to hear ``is the truth, the whole truth, and nothing but the truth, which will be unusual in this Enron thing.''
Skilling, Lay, Causey and Buy all spoke to the three Enron directors who investigated the partnerships. Fastow declined to answer most questions, and Kopper declined to speak to them. The investigative team, led by University of Texas School of Law Dean William Powers, had no power to compel anyone to talk to them.
Zywicki said witnesses generally invoke their 5th Amendment rights only if they believe something they say will expose them to criminal liability. The Justice Department is investigating whether laws were broken.
But hearings held so far, particularly those delving into former Enron auditor Arthur Andersen's culpability in alleged accounting improprieties, have been ``extraordinarily adversarial,'' Zywicki said.
``The whole case so far has been basically musical chairs, shifting the blame to figure out who's going to be left holding the bag at the end,'' he said. ``Clearly at this point Skilling seems to have calculated that he's not going to be the one who's going to take the fall.''