Senate Panel Cites Enron for Contempt

A frustrated Senate committee voted Tuesday to issue a new contempt charge against the bankrupt Enron Corp. and ask California prosecutors to open criminal investigations into destruction of documents by company officials.

Several committee members voiced alarm at suggestions that top Enron executives may have sought to thwart the committee’s investigation of suspected price gouging during the state’s energy crisis last year.

“We have to look at jail time [for Enron officials],” Sen. Debra Bowen (D-Marina del Rey) told fellow members of the Select Senate Committee on Price Manipulation of the electricity market.

On a unanimous bipartisan vote, the committee adopted a finding of contempt against Enron for disobeying a committee subpoena last week. The committee ordered the company to produce a representative who could testify on Enron’s failure to turn over certain confidential pricing documents.

It also unanimously authorized Chairman Joe Dunn (D-Santa Ana) to ask district attorneys in San Diego and Sacramento counties and Atty. Gen. Bill Lockyer to investigate whether any criminal laws in California were broken when Enron employees shredded documents, allegedly on orders of their superiors.

The committee wants to find out if the destroyed documents dealt with Enron’s pricing actions in California, although members conceded this evidence would be difficult to get. Violations of the California anti-destruction laws could result in jail or prison terms, the panel was told.

At the hearing, Dunn noted that none of the half-dozen energy companies in the investigation, including Enron, had agreed to sign a promise that it would not destroy subpoenaed documents. Likewise, other companies have been reluctant to surrender their records.

Financial sanctions against Enron, Dunn said, might “impact Enron in its current behavior” but also sends a “clear message to the rest of the [energy producers] that ... we are serious about this investigation.”

For Enron, it was the second time the Senate committee voted for a contempt citation. A similar charge was brought last summer for failure to comply with demands for information. It never came to a vote of the full Senate because Enron representatives indicated at the last minute that they would cooperate and make the documents available.

In the first citation, which remains alive in the Rules Committee, it was recommended that Enron be fined about $1 million a day for each day it failed to comply. Then, as now, there was talk of prohibiting the company from doing business in California, an extreme sanction that few lawmakers believed would be carried out.

The contempt process is rarely used by the Legislature. It was last tried in 1929 when several executives of a cement company were sent to jail for refusing to cooperate in a price-fixing investigation. Later the state Supreme Court voided the contempt citations.

No representatives of Enron appeared at the hearing Tuesday. But later, Karen Denne, a corporate spokeswoman, insisted that the beleaguered company had tried to cooperate with the Senate committee.

“I’m not sure what they are holding us in contempt for,” Denne said. “We’ve made every effort to make those documents accessible to the committee.” For example, Enron recently told Dunn that he could see the documents in Portland, Ore., or Houston, she said.

Dunn said Enron executives broke their promise last summer to make the records available in Sacramento. He said he learned only a few days ago that the records the committee sought were stored only in Houston and Oregon and would not be sent to repositories in Sacramento.