Details of Enron Meetings Sought
Scrutiny of beleaguered Enron Corp. intensified Tuesday with a demand by Rep. Henry A. Waxman (D-Los Angeles) that Vice President Dick Cheney disclose information about his meetings with the Houston company during the drafting of the administration’s national energy plan.
Meanwhile, Enron struggled through its second business day as a bankruptcy-protected company. The company fired 4,000 workers Monday, more than half its Houston work force, and its flagship Internet trading operation was doing only limited business.
Enron on Sunday became the largest U.S. company ever to file for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code, which gives a company some breathing room while it works out a plan to repay creditors. Enron lined up $1.5 billion in financing Monday and began frantically negotiating with its banks to create a joint venture to save its once-vaunted trading operation, which used to handle one of every four wholesale energy trades.
EnronOnline, the Web version of the operation, was not trading Tuesday, and the dwindling list of companies still willing to trade with Enron had to contact the company by telephone.
Traders could see prices for about 125 energy products but had to call the company to buy or sell, spokesman Eric Thode said. Before Enron’s financial meltdown, the company traded nearly 2,000 kinds of contracts for energy and other commodities.
Investors and trading partners were driven away by disclosures involving off-balance-sheet partnerships the company has since acknowledged racked up huge debts.
On Tuesday, the stocks of Enron and Dynegy Inc., the Houston rival that canceled its proposed merger last week, revived a bit as Wall Street awaited further developments in the fast-changing saga. Enron, down 99% in a year, rose 47 cents to close at 87 cents a share on the New York Stock Exchange; Dynegy shares gained $3.98 to close at $31.15, also on the NYSE.
In Washington, Waxman called on Cheney to make public details of private meetings he and his energy task force held with Enron executives.
At the same time, staff of the House Energy and Commerce Committee met with Securities and Exchange Commission officials and prepared to send a team of investigators to Enron headquarters in Houston this week to begin poring through records in preparation for a congressional hearing early next year. The SEC is conducting its own investigation into Enron’s dealings and that of its accountant, Arthur Andersen.
“Sorting through this mess is going to take some time,” said Ken Johnson, a spokesman for Rep. W.J. “Billy” Tauzin (R-La.), the committee’s chairman. “Clearly, Enron’s many off-the-balance-sheet partnerships created a sort of accounting black hole that will make it more difficult for our investigators to determine what went wrong. But one way or another, we intend to get to the bottom of this.”
Contrary to published reports, Justice Department officials said no formal investigation of Enron is underway, but they did not discount the possibility that a probe could develop as more details of Enron’s operations became known. An Enron spokesman did not return calls seeking comment.
The Senate Energy Committee plans to investigate Enron’s effect on the U.S. energy market, and Energy Secretary Spencer Abraham said Tuesday that he also may order a review. The House Financial Services Committee said two of its subcommittees will hold a joint hearing Dec. 12 and would seek testimony from chief executives Kenneth L. Lay of Enron and Joseph F. Berardino of Andersen.
Waxman’s demand revives a dispute between Democratic lawmakers and Cheney over the closed-door meetings held by his task force during the drafting of a national energy policy.
“In light of Enron’s financial failure, you should reconsider your insistence on secrecy,” Waxman, top Democrat on the House Government Reform Committee, said in a letter to Cheney.
“It is also important to know to what extent the task force relied on information from Enron that may have been unreliable or self-serving,” Waxman said.
There was no immediate reaction from Cheney’s office.
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Rivera Brooks reported from Los Angeles, Simon from Washington. Reuters news service was used in compiling this report.
