Capitol Hill last week wasted little time in calling for hearings and investigations into the events that led up to and caused the financial collapse of energy giant Enron Corp.

House Energy and Commerce Committee Chairman W.J. “Billy” Tauzin (R-LA) directed the panel’s staff counsel to carry out an investigation into Enron’s financial meltdown, and expects to hold hearings; Senate Majority Leader Tom Daschle (D-SD) wants to see if the company’s breakdown reflects a wider problem in the energy industry; Senate Energy Committee Chairman Jeff Bingaman (D-NM) plans a hearing into the broader issue of “data transparency and competition” in the energy markets; while Rep. John Dingell of Michigan, ranking Democrat on the energy and commerce panel, warned that there may be more Enrons out there.

“This problem is not limited to Enron. There are likely other ticking time bombs out there with smoke-and-mirror earnings. Our accounting and auditing system and its oversight are seriously broken and need immediate reform,” Dingell said in a statement Thursday.

“Enron went from the No. 7 company on the Fortune 500 to a penny stock in a stunning three weeks because it apparently lied for years in its financial statements,” he charged. “Where was the SEC? Where was the FASB [Financial Accounting Standards Board]? Where was Enron’s audit committee? Where were the accountants? Where were the lawyers? Where were the investment bankers? Where were the analysts? Where were the institutional investors? Where was common sense? These are a few of the questions I intend to pose to the appropriate suspects over the next few weeks.”

Earlier this month, Dingell called on the Public Oversight Board to carry out an “oversight review or special investigation” of Enron’s accounting firm, Arthur Andersen LLP. The Securities and Exchange Commission, as part of its continuing probe of Enron, has subpoenaed financial records and documents from Arthur Andersen pertaining to the once high-flying energy company, a spokesman for the Chicago-based accounting firm confirmed last week.

The House Energy and Commerce panel has jurisdiction over accounting practices, and “we are very interested in how the company handled its financial books,” said committee spokesman Ken Johnson. Because the committee currently has a full plate with bio-terrorism and medical reform bills, he said hearings into Enron’s financial collapse “in all likelihood” won’t be held until early 2002.

“We’re certainly going to try to find answers to the questions involving the collapse of Enron,” Daschle said last Thursday. But he wants to further assess the situation to see “if it [is] indicative of the energy industry in a larger context, and if it is, what we [ought] to do about it.”

Although the “consequences for energy markets of Enron’s collapse are unclear” at this point, Bingaman believes the events of last week “highlight the importance of issues such as data transparency and competition in the natural gas and electricity markets.” He said he has directed his staff to begin preparing for a hearing on these issues. “I believe that our committee is keenly aware of the need for enhanced oversight and market monitoring” of the energy markets.

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