Investigating Enron

GWEN IFILL: Joining me are two members of the House Energy and Commerce Committee. John Dingell of Michigan is the panel's senior Democrat. And Republican Jim Greenwood of Pennsylvania is the chairman of the panel's Oversight and Investigations Subcommittee.

Gentlemen, welcome.

Congressman Greenwood, tomorrow your subcommittee gets to work. What is it you're going to be look for?

REP. JIM GREENWOOD: We have committed to make sure that no stone goes unturned in this investigation.

And one of things that we discovered early as we reviewed documents and, as we talked to witnesses, was that Arthur Andersen destroyed thousands of documents.

There's an urgency on our part to make sure that we find out which documents were destroyed, what were on those documents, who ordered the destruction of those documents.

Were those documents destroyed as we actually know that they were when Arthur Andersen knew that there was pendency of the investigations by the Securities & Exchange Commission as well as a potential litigation?

All that needs to happen so we can begin to make sure that we have all the pieces of the puzzle so that we can get to the bottom of Enron collapse.

GWEN IFILL: As Kwame Holman just reported, the star witness for tomorrow's hearing David Duncan from Andersen has said that he will not testify, that, in fact, if he shows up at all he will take the fifth.

Are you prepared to grant him any kind of immunity?

REP. JIM GREENWOOD: I received a letter today from Mr. Duncan's attorney saying that if we would grant him immunity, he would be pleased to testify.

We reject that notion. Mr. Duncan is a key player. He has much to tell the nation about his conduct that had an impact on thousands of lives of American citizens. He spoke for four and a half hours to our investigators. We think he should come and tell the members of our committee what he did and why he did it, if somebody told him to do those things.

We insist that he come. He has a right it invoke his fifth amendment guarantees. We regret that he will do that but we think we can get to the bottom of this through interviewing our other witnesses.

GWEN IFILL: Mr. Dingell in your opinion, are you searching in these hearings for evidence of political malfeasance, corporate malfeasance? What?

REP. JOHN DINGELL: I think we have to get all the facts, all the circumstances, everything that happened, and then we'll make whatever judgments should take place with regard to proper congressional action.

If there was improper action anywhere including in government or in Enron or in the accountant Andersen, it should be brought it light it see what needs to be done to correct this kind of situation and see to it it's not repeated.

GWEN IFILL: Where do you start with this Mr. Dingell? Is there a regulatory question that you ask first?

REP. JOHN DINGELL: Well, I must say my friend Mr. Greenwood and Mr. Tauzin, who are the chairman of the committee and the chairman of subcommittee respectively, will be making those decisions.

We will be working with them in a bipartisan fashion as we have up until now and hope that we'll be successful in that undertaking and see to it that the committee works together to bring out all the facts.

GWEN IFILL: But as the senior Democrat on the committee you must have opinions about what you think are the biggest problems that you'd like to see questions answered on first.

REP. JOHN DINGELL: Well, there is a plethora of mischief here: Criminal activity possibly; possibly obstruction of justice; inside trading; inside accounts improperly used -- the question of Mr. Cheney's commission and Enron's participation in that are all involved in this matter and I think we have it get to the bottom of all of it.

We have it look at the accountants Andersen, why was it that Andersen destroyed documents? Why was it this Enron destroyed documents? This raises a presumption almost on its face of wrongdoing.

What happened to the inability or the reluctance of Andersen to deal with the accounts of the partnerships, which were kept off books and why? The fact that Andersen functioned both as an accountant and also as a consultant raises great questions that have to be gone into. There's plenty to occupy everybody here.

GWEN IFILL: Mr. Greenwood, plenty to occupy everybody. Are these issues, which are being raised now in this investigation in both the House and the Senate, are they a sign of something larger, or are they an anomaly? Did Enron do this, and is this unusual?

REP. JIM GREENWOOD: At the center of this whole crisis is that fact that the company took hundreds of millions of dollars, invested them in relatively risky ways and failed to report that in its financial statements and did that with the complicity of its auditors.

What we have to do if there can be a happy ending to this terrible story is that we in Congress have to make laws and make it very clear that every liability that a company has, every investment that it makes, every dollar that has at risk is transparent, is known to the investors.

We need to have confidence in our country that you can make investments as risky as you want or as safe as you want but at least you know what it is you're getting into. And that's what we have to accomplish so that this never happens again.

Is this an anomaly? I think it is an anomaly in that we haven't seen anything like this before. It's hard it believe on the other hand that it doesn't happen elsewhere. I would hope to the extent that other corporations -- other accounting firms have been engaged in other activities - that right now they are busily cleaning up their act but we have a responsibility to make the law clear so that it can't happen again.

GWEN IFILL: You're talking about things that Congress has to do. There's a phrase about "closing the barn door after the horse has gotten out," or something like that.

Do you feel that Congress should have been doing this prior to this happening?

REP. JIM GREENWOOD: Well, I think it probably comes as a surprise to most members of Congress -- if not all members of Congress -- the transactions of these magnitudes and of these natures could, in fact, be kept off the books.

I, for one, fully expected that it was required that these kinds of deals be kept off the books. I think it's become way too easy to have a small amount of investment by an outside party in a big partnership, big investment by this corporation cause it to be kept off the books. We have to change that.

Is this closing the barn after the horse is gone? It is in some extent but it is also closing the barn doors before any other horses get out that could cause tragedy for any other families.

GWEN IFILL: Mr. Dingell what do you have to say to that? Did Congress perform its oversight role in is this?

REP. JOHN DINGELL: Well, Congress has done worse than that. First of all, we were warning about the problems back in the 1980s of having an accountant and auditor, on the one hand, be also a consultant.

We warned that this was a fine opportunity for rascality and mischief. I would note that Andersen has twice before been involved in significant abuses and paid large sums out of a result of lawsuits against them -- the first instance being Sunbeam, the second instance being Waste Management Incorporated -- serious offenses.

It is to be noted that Arthur Leavitt, the then chairman of the SEC, did everything he could to bring this practice of abuse in the accounting profession, particularly the accountant and consultant problem to a halt.

The Congress beat the bejeebers out of him. They threatened to cut his money over this. So this is not a surprise. I am hopeful that the barn door is not being locked I'm sure there's other rascalia which can and will occur if something is not done about this, and I want to see to it that it is done with the utmost vigor so that we can correct all of the aspects of this including whether or not the SEC did its job.

GWEN IFILL: Mr. Dingell you mentioned a moment ago about Vice President Cheney's role. One of his aides, Mary Madeleine, has been quoted as calling this guilt by contribution, that is people who have received money from Enron or from Andersen are being tainted by that.

Do you feel that members of Congress like yourself who have received money from these kinds of corporations are in a position to investigation them?

REP. JOHN DINGELL: Well, first of all, any member of Congress receives money on the assumption that it is for the serving of the public interest and that he is expected to carry out his duty of looking to the public good.

And if Andersen made these contributions as an investment, they made an investment that is about as good as an investment in Enron's stock.

Having said these things, I would simply note to you that I have had the pleasure of taking that money, giving it to the fund for the employees and we will have a vigorous and thorough investigation of Enron, Andersen and we'll get to the bottom of matter and I hope that the necessary corrections take place, including perhaps a fine jailing or two for some deserving people.

GWEN IFILL: And Mr. Greenwood, how do you respond to that question about contributions, which went to members of Congress who now have to investigate these entities?

REP. JIM GREENWOOD: Well, I happen to be a member of Congress who doesn't accept campaign contributions from Political Action Committees.

We looked back and we found out that four years ago Mr. Lay made a personal campaign contribution of a thousand dollars to me that's apparently the result of the fact that my campaign manager was in the same fraternity. I also made a contribution or am about to make a contribution to that fund as well it.

But I think it does to the question of the need for campaign finance reform. There are several layers of this. There are individual contributions that max out at $1,000. There are PAC contributions that can be as much as $5,000 a year, but then there's the big soft money contributions. We know that Enron wrote checks for as much as $100,000 at a time to the Republican and Democratic National Committees.

That's the essence of the campaign finance reform embodied in Shays-Meehan. I'm a co-sponsor of that, signed a discharge petition to get that out on the floor. We ought to pass that and the help to restore confidence in the political system for the American people.

GWEN IFILL: Have you detected a change in attitude among your colleagues about the campaign finance reform legislation because of this?

REP. JIM GREENWOOD: Slightly. This is still very, very uphill sledding for us to try get this kind of reform passed.

The old adage of American politics is that when the American people decide something needs to happen, it will happen. As long as the American people keep returning to office people who don't support campaign finance reform we won't have campaign finance reform.

When the American people decide that that's an issue that is critical to the casting of their vote - hopefully they'll do that this year -- that will put pressure on all members of Congress to do something about this urgent need for campaign finance reform.

GWEN IFILL: Final question to you and also to Mr. Dingell. We heard Trent Lott and Don Nickles bemoaning the potential for distraction; that there so many committees investigating this Enron scandal. What do you think of that?

Do you think this could be a distraction for other things Congress could be getting done?

REP. JIM GREENWOOD: To the contrary -- we can walk and chew gum -- but the fact of the matter is that what we have to do for this story, as I said, to have a happy ending is we have to pass laws that make it impossible or certainly illegal for companies to play the shell game that Enron played in hiding its liabilities from its investors.

The more members of Congress that are engaged in learning about this issue, understanding what happened, asking the right questions of the right witnesses, reading about this, the sooner it will be that Congress will be in a position to intelligently legislate so this never happens again.

GWEN IFILL: And Mr. Dingell, your response about whether this is indeed a distraction or not.

REP. JOHN DINGELL: Well, I think we urgently need it have campaign finance reform. There's too much money in politics.

It may not be corrupting the situation but it's certainly threatening public trust, and it's certainly created a situation where too much attention is given to things that ought not be heeded so much and more attention is needed to the business of the nation.

But, having said that, I don't think that we're going to see less than a thorough investigation. There's too much going on to force it. You're going to find that criminal prosecutions, investigations by the SEC, civil lawsuits and other things plus the activity of the press is going to see that this matter goes forward properly. I also am prepared it believe and I think that my colleagues are going to do the best job possible they can in terms of investigating this.

And very frankly, I think this is a fine mess that needs a thorough going investigation, serious legislative and other correction, and very frankly some very serious sanctions against wrongdoers.

GWEN IFILL: Okay. Congressmen, we'll be watching. Thank you for joining us.

REP. JIM GREENWOOD: Thank you for having us.