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Senate panel votes to issue subpoena for Lay



WASHINGTON (CNN) -- The Senate Commerce Committee voted Tuesday to issue a subpoena to compel former Enron CEO Kenneth Lay to appear before the committee.

Republicans and Democrats on the panel unanimously supported the efforts to subpoena Lay, who backed out of his planned testimony Monday before a Commerce Committee subcommittee because of what his attorney predicted would be a "prosecutorial proceeding."

Lay is likely to appear before the panel next week.

In addition, the House Financial Services Committee had hoped to subpoena Lay to appear Tuesday but did not after Lay's attorney said Monday he didn't know how to reach his client in time.

The attorney, Earl Silbert, said it would be "unreasonable" for Lay to appear Tuesday because "he's not here in Washington." He said the former Enron chief left Washington late Sunday or early Monday for Houston, Texas. Lay was in Houston on Tuesday morning.

After the Senate committee voted to issue the subpoena, U.S. Sen. Byron Dorgan, D-North Dakota, said he "regrets that we've gotten to this point" and called the investigation into Enron "very serious business."

During the Senate hearing, Dorgan said, "When you juxtapose what happened to the people at the top and what happened to the people at the bottom it makes you sick."

Dorgan mentioned an Enron employee whose retirement fund shrank from $330,000 to a little more than $1,000 and an executive who parlayed a $25,000 investment into $4 million within 60 days.

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U.S. Sen. Kay Bailey Hutchison, R-Texas, said she was concerned about political rhetoric on the matter and said "all of us are equally concerned about what has happened."

"I want the facts. I want to protect people in the future," she said.

U.S. Sen. Ron Wyden, D-Oregon, said thousands of people in his state have been hurt by the collapse of the company. He urged that the committee stay on the inquiry into Enron "until we get all the facts on the table."

A couple of senators, such as John Breaux, D-Louisiana, and Conrad Burns, R-Montana, said they doubt that Lay would testify once he appears.

Lay was to testify Monday about the collapse of the Houston-based energy trading company but refused to show up for two congressional hearings.

As a result, the Senate Commerce subcommittee hearing was canceled, but the House Financial Services Committee proceeded with an afternoon subcommittee hearing.

An attorney for Lay said his client will appear before congressional panels at a later date.

Meanwhile, Arthur Andersen CEO Joseph Berardino appeared Tuesday morning before the Capital Markets subcommittee of the House Financial Services Committee. His firm was formerly Enron's auditor.

In a prepared statement, Berardino listed a number of actions that Andersen is taking in the wake of Enron's collapse.

He announced that former Federal Reserve Board Chairman Paul Volcker agreed to chair an independent oversight board to work with Andersen in making changes in its audit practice.

"Andersen and this committee share common goals to get to the truth about what happened at Enron and to help develop policies that will improve our capital markets, enhance audit quality and better protect the investing public," Berardino said.

He called for "working with the management and the audit committee of every publicly traded U.S. audit client to establish a formal process for determining the acceptable scope and level of fees for those nonaudit services that Andersen will continue to provide."

He said offices of audit quality and ethics and compliance will be created.

"The changes we have announced are meaningful, significant and helpful," Berardino said.

Other congressional panels Tuesday are also dealing with issues involving Enron.

The Senate Governmental Affairs Committee is meeting to discuss the impact of the Enron bankruptcy on 401(k) plans.

The House Energy and Commerce Committee's Oversight and Investigations subcommittee began its hearing, where William C. Powers Jr. is testifying. Powers, who authored a recent internal review critical of Enron practices, is a member of Enron's board of directors and dean of the University of Texas Law School.



 
 
 
 





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