Search the Internet          Tips  Sites: Finance, Investment

Senate panel head slams SEC chief on Enron response

The chairman of a key Senate panel said he would turn ''a suspicious eye'' on any response from America's top markets cop to the Enron Corp scandal, on the eve of the a controversial appearance before Congress by the bankrupt company's former chairman.

Zeroing in on old business ties between Securities and Exchange Commission Chairman Harvey Pitt and Enron's former auditor Andersen, Sen Ernest Hollings told Reuters he was unhappy with Pitt's handling of the Enron collapse and its fallout.

''I'm not satisfied,'' said the South Carolina Democrat, who has charged the Republican Bush administration with running a ''cash and carry government'' in relation to Enron, a former energy trading giant.

''Whatever he (Pitt) would recommend, I'd look at with a jaundiced eye,'' Hollings said in an interview, sharpening criticisms of Pitt simmering below the surface of the Enron controversy as he has tried to formulate a policy response.

Reacting to the Enron affair, Pitt has proposed a new overseer for the accounting profession, which he once represented as a private attorney. Corporate bean-counters such as big five firm Andersen -- once Pitt's client as well as Enron's auditor -- have come under fire for bungled audits.

On Hollings' barbs, SEC spokeswoman Christi Harlan said, ''Chairman Pitt has said all along that he now represents the best client in the world and that's the investing public.''

The Senate Commerce Committee, chaired by Hollings, was expecting former Enron chairman Kenneth Lay -- who has dodged previous congressional invitations -- to appear before it under subpoena on Tuesday morning, but to refuse to testify under his Fifth Amendment right against self-incrimination.

''He'll come in and he'll have to be sworn. He'll make his statement that he's going to take the Fifth. That will be it,'' said Hollings, one of dozens of members of Congress who got campaign donations from Enron but is now investigating it.

''I don't think we'll try and grandstand the situation. It's a serious scandal, not just a corporate scandal,'' he added.

Enron has preoccupied Congress since the company filed the largest bankruptcy in US history on December 2, devastating investors, destroying thousands of jobs and prompting investigations by nine congressional committees.

Seeking to bring some order to lawmakers' inquiries, Hollings called again for a select committee or a special prosecutor, but conceded, ''it's not a popular idea.''

In addition to expressing concerns about Pitt, Hollings suggested the Justice Department's criminal probe of Enron, still months from conclusion, could be open to question.

Attorney General John Ashcroft, who heads justice, has recused himself from its inquiry because he took campaign contributions from Enron. He has named Deputy Attorney General Larry Thompson to head the probe. Thompson's former law firm once represented Enron. Thompson has refused to step aside.

Pointing to Thompson's connections, Hollings said, ''if that isn't a taint of a conflict, what's a taint of a conflict?''

A justice department spokesman said the department saw no need for a special counsel. ''There is no conflict of interest,'' said spokesman Byron Sierra. He said the department's ethics lawyers had examined the circumstances.

Hollings said Enron represented a massive political scandal with deep roots across the Bush administration, but he complained the President's wartime popularity has restrained others from asking tough questions about the affair.

''Everybody says there's a halo over there (at the White House). I don't see any halo,'' said the senator.

In what could shape up as an historic clash between Congress and the President, the general accounting office has threatened to sue in court for access to records of Vice President Dick Cheney's energy task force's Enron dealings.

Hollings said the GAO has the authority and responsibility to ask for the task force documents. He said he was confident a court would rule in favor of Congress' investigative arm if legal action resulted.

As for the administration's argument that withholding Cheney's records from Congress was part of a broader effort to restore presidential power, Hollings said, ''That's baloney.''

ALSO READ:
The Enron Saga