Will he show?
Apparently, that seems to be the big question surrounding former Enron CFO Andrew Fastow as a congressional panel kicks off hearings today. The panel will be conducted by two financial services subcommittees to determine whether there were accounting violations committed by Enron Corp. and its auditor.
Joseph Berardino, chief executive at Big Five accounting firm Arthur Andersen LLP — Enron’s longtime auditor — and Robert Herdman, chief accountant of the Securities and Exchange Commission, plan to appear before the panel. Enron and ex-Enron officials, including Fastow, do not intend to show up.
“We don’t believe we would be able to adequately serve the interest of the committee while at the same time trying to serve the interest of our credit shareholders and our current and former employees,” Enron spokeswoman Karen Denne told the Associated Press.
But some congressman don’t see it that way. “I don’t think they want to, or are not prepared, to answer some very pointed questions about what went wrong,” Rep. Michael Oxley (R-Ohio), chairman of the House Financial Services Committee, told the AP.
Oxley said his committee does not plan to subpoena Fastow to force his appearance. But the House Energy and Commerce Committee, which is conducting its own probe, has given Fastow until December 21 to meet with committee investigators — or face a subpoena to testify at a hearing, according to the wire service. “Quite simply, he cannot be found,” said Ken Johnson, a spokesman for Rep. Billy Tauzin (R-La.), the panel’s chairman. “We are troubled by his unresponsiveness.”
Last week, rumors began surfacing that Fastow had purchased airline tickets and might be planning to leave the country. Indeed, CFO has been told by one source close to Enron that Fastow may have plans to travel to Israel. CFO’scalls to Fastow’s lawyer have so far gone unanswered.
Wednesday’s hearings are intended to help Congress “understand as best we can what structurally went wrong, what mistakes were made and what mistakes were not noticed,” Oxley was quoted as saying.
Among the topics to be discussed at the hearings include accounting practices by the company and Andersen, potential securities law violations, and Enron’s handling of its employees’ 401(k) retirement plans, Oxley said.
“The people who have run Enron are crooks who have ripped off American consumers, they ripped off their employees and they’re now in line for a welfare payment” from tax breaks in the economic stimulus package before Congress, said Rep. Bernard Sanders (I-Vt.), a member of the Financial Services Committee, in an interview with the AP.
The hearings are being conducted by the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises and the House Subcommittee on Oversight and Investigations.
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