The chief executive officer of Enron Corp. is resigning from the bankrupt energy company.
“This was a decision the board and I reached in cooperation with our creditors’ committee,” Kenneth L. Lay said last night in a statement released by Enron.
Earlier yesterday, the chief auditor for Enron’s accounting firm announced through his lawyer that he would invoke the Fifth Amendment rather than testify before Congress without immunity.
David B. Duncan, of Arthur Andersen & Co., was fired over his role in the destruction of Enron Corp. documents and had been subpoenaed by the House Energy and Commerce subcommittee on oversight and investigations to answer questions today concerning that shredding.
In the statement, Mr. Lay, who also is Enron chairman, said the multiple investigations into Enron’s activities take up too much time for him to concentrate fully on restoring Enron’s value to shareholders.
“I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company and preserving value for our creditors and hard-working employees,” Mr. Lay said in the statement.
Enron said its board and its creditors’ committee will pick a restructuring specialist to act as CEO along with helping the company’s efforts to come out of bankruptcy.
Mr. Lay is expected to testify before two congressional committees on Feb. 4.
But in today’s House hearing, according to attorney Robert J. Giuffra Jr., Mr. Duncan will “rely on his constitutional right not to testify” without a grant of immunity.
Congress can compel a witness to attend a hearing, but cannot force him to answer potentially incriminating questions without immunity. Mr. Giuffra said the subcommittee was taking the “unusual step” of requiring his client to “exercise his constitutional rights on national television.”
Mr. Duncan met with committee lawyers last week for more than four hours, although he was not under oath. Mr. Giuffra told the subcommittee his client would “continue to assist the committee’s important work,” but it would be “premature” for Mr. Duncan to give sworn testimony because he “has not yet had access to all of the documents necessary for him to prepare for a formal hearing.”
The panel also subpoenaed Joseph Berardino, Andersen’s chief executive officer, to appear today, but agreed to allow the firm to send instead another top official familiar with an Andersen in-house inquiry into the destruction of the Enron documents.
Also scheduled to appear today are Andersen attorney Nancy Temple and the firm’s risk manager, Michael Odom.
The subcommittee probe is one of several ongoing congressional investigations into Enron’s collapse. At least eight other committees are probing the matter. The Justice Department, the Securities and Exchange Commission and the Labor Department also are probing the firm’s failure, along with Andersen’s involvement in the destruction of Enron-related documents.
At the Labor Department, officials said their inquiry has focused on identifying executives responsible for employee retirement plans to determine whether they acted in the best interest of the plans and their participants.
Assistant Labor Secretary Ann Combs told reporters the probe would “take some time,” although she declined to elaborate. The department’s probe falls under the Employee Retirement Income Security Act of 1974, which governs pension plans, as well as health, disability and life insurance plans.
Enron executives had blocked employees from selling stock held in their 401(k) retirement plans, even as the firm’s stock plummeted eventually dropping from about $85 a share to less than a dollar.
Meanwhile, four key Democratic senators yesterday endorsed a proposed General Accounting Office probe of meetings between the Bush White House and industry leaders on the administration’s energy policy, including Enron executives.
Sens. Joseph I. Lieberman of Connecticut, Carl Levin of Michigan, Byron L. Dorgan of North Dakota and Ernest F. Hollings of South Carolina want the GAO to look into long-standing requests by Democrats for White House contacts with the energy industry.
In a letter to Comptroller General David Walke, the senators said the public “deserves answers” on the question of who met with Bush officials concerning the development of the administration’s energy policy.
The White House has questioned the GAO’s authority to demand documents pertaining to White House meetings with leading energy officials.