SACRAMENTO — A California Senate committee, convinced that bankrupt energy giant Enron has destroyed financial documents under legislative subpoena, voted Tuesday to seek criminal charges against the company for concealing evidence and conspiracy.
Committee members also voted to ask the full Senate to find Enron in contempt of two legislative subpoenas — one issued in June seeking documents related to California’s energy market and the other for testimony about destruction of documents.
The committee voted 5-0 to ask the district attorney from either Sacramento or Orange County to investigate whether Enron intentionally withheld documents from investigators or destroyed any relevant papers.
Lawmakers investigating California’s power crisis asked Enron for thousands of documents in June, but the company’s destruction of documents and shredding done by its accountants may have violated that order, Sen. Joe Dunn, D-Santa Ana, said.
Last month, Enron officials ignored a committee request to testify about which documents may have been destroyed.
Enron officials didn’t attend Tuesday’s hearing of the Senate Select Committee to Investigate Price Manipulation in the Wholesale Energy Market. Calls for comment were not immediately returned.
Last week, Enron Vice President Richard B. Sanders wrote Dunn to say there was no reason for company officials to testify because Enron wasn’t “aware of anyone from Enron who made inquiries to Arthur Andersen regarding what documents were destroyed.”
Andersen was the major accounting firm that audited Enron’s books; Andersen officials have said their accountants shredded some Enron-related documents.
Larry Drivon, an attorney for the committee, recommended that prosecutors also investigate whether company employees conspired to withhold or destroy documents, which would elevate the crime from a misdemeanor to a felony.
Enron has now invited investigators to search the company’s document repositories in Portland, Ore. and Houston, Texas, for trading and policy documents they subpoenaed last year, Dunn said.
The committee also is preparing subpoenas for testimony from Andersen regarding destruction of some Enron documents.
“I seriously doubt that Enron will ever send us anything more significant than a picture postcard from the Cayman Islands while I’m alive, much less any of the financial documents we are seeking,” said Sen. Debra Bowen, D-Marina del Rey.
The committee has subpoenaed documents from a half-dozen energy companies as part of the investigation into the state’s power crisis last year, when energy prices soared.
No company has complied fully with the subpoenas, Dunn said, but some have cooperated more than others. All have done more than Enron.
The committee has reviewed millions of documents turned over by the energy suppliers, but hasn’t yet been given key internal documents, such as companies’ forecasts for power prices in California, he said.
In the early 1990s, the energy industry touted deregulation as a way to cut consumer prices by increasing competition, Dunn said. But the committee investigators believe that energy companies’ internal price forecasts will show they were predicting huge revenue increases as California’s power market was deregulated.
Last summer, the committee asked the Senate to find Enron in contempt for not providing documents. That request was withdrawn after Enron and Dunn reached an agreement
to keep the documents confidential.
If the full Senate votes this time to find Enron in contempt, sanctions could include fines, or stripping the company’s authority to do business in California, Dunn said.
If the full Senate imposes sanctions against Enron, it will be the first time since 1929, when the Senate voted to jail reluctant witnesses during a committee investigation of price fixing and price gouging allegations involving cement sales to the state.