Ex-Enron CEO Expected to Remain Silent

Former Enron Corp. Chairman and Chief Executive Kenneth L. Lay will refuse to testify Tuesday when he appears before a congressional committee investigating the collapse of the energy trading giant, his spokeswoman said Sunday.

“Under the instruction of counsel, Mr. Lay will exercise his 5th Amendment right at the Tuesday hearing,” Kelly Kimberly said, declining further comment. The amendment grants constitutional protection against self-incrimination.Lay’s announcement came after a number of leaders of the various congressional committees probing Enron’s collapse made clear on the Sunday morning talk shows that they didn’t believe the testimony of Lay’s former lieutenant, Jeffrey K. Skilling. He did not invoke the 5th Amendment on Capitol Hill last week.

The skepticism expressed by lawmakers about Skilling’s testimony could have influenced Lay, who canceled two voluntary appearances before congressional panels last week because of what his lawyer called the “prosecutorial” comments of lawmakers on talk shows. Lay was then subpoenaed by two congressional committees.

Rep. W.J. “Billy” Tauzin (R-La.) said that Skilling could be in “legal jeopardy” for denying to Congress that he knew about the shadowy financial transactions that led to the nation’s largest corporate bankruptcy filing.

“He really thought he was smarter than everybody in Washington,” said Tauzin, chairman of the House Energy and Commerce Committee and one of several lawmakers who were skeptical of Skilling’s testimony. “I’m afraid he may have put himself in some legal jeopardy....”

Skilling attorney Bruce Hiler responded, “We are shocked at the unsupported charges being leveled at our client by those in a position to know of their inaccuracy.”

The once highflying energy company--the seventh-largest corporation by revenue in last year’s Fortune 500--filed for Chapter 11 bankruptcy protection Dec. 2 amid questions about its accounting practices.

Since then, thousands of workers lost their jobs; many more saw their retirement plans--largely invested in company stock--become almost worthless as Enron’s stock price tanked.

A dozen congressional panels and several government agencies are investigating Enron’s collapse and examining what new laws are needed to protect workers and stockholders.

Among the investigating agencies is the Labor Department, which on Sunday said it is seeking to remove Enron officials from a committee that oversees the company’s retirement plans on behalf of participants, and replace them with an independent legal representative. The agency is investigating whether the officials legally responsible for Enron’s 401(k) plan--called fiduciaries--were prudent and acted only in the interest of the employees and the plan as required under the Employee Retirement Income Security Act of 1974, which governs employer-provided retirement plans.

The department has been negotiating with Enron lawyers for about a month, and Assistant Secretary Ann Combs said she hopes an agreement can be reached without a “lengthy court proceeding.”

Eli Gottesdiener, a Washington attorney suing the company on behalf of employees and retirees who had 401(k) retirement plans at Enron, said Sunday he would file a motion today in federal court in Houston seeking removal of the Enron executives overseeing the savings plan.

Enron had several retirement plans with different administrative committees, though there is much overlap among the members, according to the Labor Department.

In an appearance Thursday before the House Energy and Commerce subcommittee on oversight and investigations, Skilling swore that when he resigned from Enron on Aug. 14--citing personal reasons--he was unaware of the off-the-books partnerships used to hide the company’s debt. Many lawmakers and legal experts had expected Lay to invoke his constitutional right against self-incrimination, as four other Enron executives did last week.

“Lay’s got a good lawyer,” Sen. Ernest F. Hollings (D-S.C.), chairman of the Senate Commerce Committee, which subpoenaed Lay to appear before his panel Tuesday, told “Face the Nation.” “I can’t see, with things having gotten worse all week long, him testifying now.” Hollings, complaining about Enron’s ties to the Bush administration, defended his call for an outside counsel, which the Justice Department has determined is not necessary.

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Times Wire Services were used in compiling this report.