Features

Enron may be subpoenaed for names of investors

By Alan Fram, The Associated Press
Saturday March 23, 2002

WASHINGTON — Lawmakers may issue subpoenas in an effort to force Enron Corp. to disclose the names of investors in its numerous partnerships, a senator involved in Congress’ investigation said Friday. 

Byron Dorgan, D-N.D., a senior member of the Senate Commerce Committee, said a final decision won’t be made until next month. But he said the panel’s chairman, Ernest Hollings, D-S.C., and Republican John McCain of Arizona believe subpoenas would be appropriate if the company does not cooperate. 

“If we don’t get the information in the next three weeks, I’d expect we’d proceed with subpoenas,” Dorgan said. 

Enron officials have said they do not have most partnership documents and the information should come from the investors themselves. Washington attorney Robert Bennett, representing Enron, was not immediately available for comment. 

Dorgan also said another panel he heads will hold an April 11 hearing on whether Enron manipulated energy prices in California. 

Enron’s web of thousands of partnerships hid more than $1 billion in debt from investors and the public, and ultimately brought down the energy company. Many of the partnerships were improperly buttressed by Enron stock, which plummeted. 

Congressional investigators want to know whether investors were pressured by Enron executives to put money into the partnerships or were promised favors in return for their funds. 

Dorgan’s subcommittee has previously asked Enron to provide this information but has gotten little cooperation, he said. 

“We need to get more information on what happened here and how extensive it was,” he told reporters. 

Investors in the partnerships included big Wall Street investment banks such as Citigroup Inc., Merrill Lynch and Co., and First Union Corp. State pension funds, wealthy individuals, private investment groups, family partnerships and insurance brokers also invested. 

Andrew Fastow, Enron’s former chief financial officer, made $30 million from running the off-the-books partnerships. He has asserted his Fifth Amendment right against self-incrimination and refused to testify to Congress. 

The Commerce committee is one of many in Congress investigating Enron’s collapse, the largest bankruptcy in U.S. history. 

Dorgan also released a report by Senate Democrats saying that on average, 40 percent of the assets in the 401(k) accounts of many of America’s largest companies are invested in company stock. 

The study, which examined 47 of the Fortune 50 companies, found that 30 percent of their 401(k) accounts had a greater concentration of company stock than Enron’s plan. The report said Enron had 57.7 percent of its plan’s assets in its own stock. 

The study also said other large corporations had far higher concentrations of their own stock in their plans last year. At Procter & Gamble, 94.7 percent of its plan assets were in company stock. 

Hundreds of Enron Corp. employees lost their retirement savings last year when the stock’s value plummeted. 

Congress is considering how to protect workers’ investments. A Democratic bill would encourage companies to diversify the holdings in their 401(k) accounts. Republicans oppose the measure because they say it will deter companies from offering 401(k) plans altogether. 

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On the Net: 

Commerce Committee: http://commerce.senate.gov