Skip to main content /LAW /LAW

find law dictionary

Enron's ex-CEO will not testify Monday

Lay's attorney says hearings would be 'prosecutorial'

WASHINGTON (CNN) -- The embattled former CEO of Enron will not testify before Congress as scheduled, a member of a key Senate committee told CNN.

A lawyer for Kenneth Lay sent a letter Sunday to Senate Commerce Committee Chairman Ernest Hollings, D-South Carolina, saying that "inflammatory statements" by several leading congressmen suggested the hearings would have a "prosecutorial tone."

"As of this morning, Mr. Lay intended to testify tomorrow. In the midst of our preparation, particularly disturbing statements have been made by members of Congress," attorney Earl Silbert wrote. "He cannot be expected to participate in a proceeding in which conclusions have been reached before Mr. Lay has been given the opportunity to be heard."

The letter specifically referred to Lay's scheduled appearance Monday before the Senate Commerce Committee. In the wake of his decision, the committee canceled the hearing.

Two U.S. congressmen outlined some of Enron's off-the-books partnerships and blasted the company's 'culture of corporate corruption.' CNNfn's Fred Katayama reports (February 4)

Play video
(QuickTime, Real or Windows Media)
Lawmakers slam Enron's 'culture of corporate corruption' 
Document: Letter from Lay's attorney to committee chair 
Enron Collapse
  •  Senate unit faults Enron board
  •  Corporate corruption in America
  •  3 Britons charged in Enron fraud
  •  Bush pushes for tougher corporate rules
  •  Playboy exposes Enron workers
  •  Document: Powers report
9.5MB (PDF)
  •  CNN/Money Special Report: Your 401(k)
  •  Timeline: Shredding through history
  •  In-Depth: The end of Enron?
  • Inside the scandal


Latest Legal News

Law Library

FindLaw Consumer Center

Silbert sent a similar letter to Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, where Lay was scheduled to testify before a subcommittee on Tuesday.

Sen. Byron Dorgan, a North Dakota Democrat on the Senate Commerce Committee, called Lay's last-minute decision a major mistake.

The former Enron CEO last month voluntarily accepted an invitation last month to testify before both committees. He was not granted immunity, meaning his testimony could be used against him in a court of law.

Dorgan told NBC's "Meet the Press" earlier Sunday that a report released the previous day by Enron "suggests massive problems," namely that the energy giant misled investors and employees about its precarious financial health and engaged in questionable accounting practices.

"This is almost a culture of corporate corruption," he said. "There's just so many tentacles to this story."

In addition to several House and Senate subcommittees, the Justice Department and Securities and Exchange Commission are investigating Enron's swift collapse and its decision to file for Chapter 11 bankruptcy protection December 2, 2001 -- the largest such filing in U.S. history.

Thousands lost their pensions and life savings in Enron's downfall, which began last fall when the firm acknowledged several hundred million dollars of previously undisclosed liabilities.

"I think we're finding what may clearly end up being security fraud," said Rep. Billy Tauzin, R-Louisiana, chairman of the House Energy and Commerce Committee, who appeared along with Dorgan on "Meet the Press."

"Attempts not to hedge or put debt out of the company, which many companies do, [but] literally fraudulent, phony attempts to do so in violation of current accounting practices, practices that should've been discovered by Enron's auditors at Arthur Andersen," Tauzin said.


Note: Pages will open in a new browser window
External sites are not endorsed by CNN Interactive.


Back to the top