After being scolded by lawmakers for more than a hour for not testifying Tuesday before a Senate panel, former Enron Chairman Kenneth L. Lay urged the senators to “not draw a negative inference” from his decision to assert his constitutional right under the Fifth Amendment to avoid self-incrimination.

“I am deeply troubled by asserting these rights because it may be perceived by some that I have something to hide. But after agonizing consideration I cannot disregard my counsel’s instruction,” he told the Senate Commerce Committee, which subpoenaed Lay to appear. The Supreme Court ruled less than a year ago that “one of the Fifth Amendment’s basic functions is to protect innocent men,” Lay reminded the panel.

“Therefore, I must respectfully decline to answer on the Fifth Amendment grounds all [of] the questions of this committee and subcommittee, and those of any other congressional committee and subcommittee,” Lay said. He also has been subpoenaed to appear before a subcommittee of the House Financial Services Committee on Thursday.

“…I come here today with a profound sadness about what has happened to Enron, its current and former employees, retirees, shareholders and other stakeholders,” said Lay, who added that he “wanted to respond…to the questions” of the Senate committee about Enron’s collapse, but was advised otherwise by his attorney. Under the Fifth Amendment to the Constitution, accused individuals cannot be forced to testify against themselves or submit to cross examination, even in a court trial. Testifying before a congressional committee would, in effect, be agreeing to undergo cross examination by numerous “prosecutors,” many of whom are up for re-election this year.

Lay refused to answer questions after being dressed down publicly by members of the Senate panel, who appeared to have pre-judged the former Enron executive and then stretched their immunity to slander and defamation laws to the limit. Sen. Peter Fitzgerald (R-IL) called him “perhaps the most accomplished confidence man since Charles Ponzi,” the creator of the infamous Ponzi scam.

“Mr Lay, we are all stunned and confused by your behavior,” said Sen. Jean Carnahan (D-M), who added that she couldn’t buy “ignorance” as a defense for either Lay or former CEO Jeffrey Skilling, whose duties were to “approve or disapprove” of the company’s course. “…I find ignorance a difficult defense.”

Lay joined four other top Enron executives — excluding Skilling — who have asserted their Fifth Amendment rights not to testify before Congress.

Skilling testified before a House subcommittee last Thursday that Enron was financially sound when he resigned from the company in August 2001, and he disavowed knowing that the controversial off-the-book partnerships that led to Enron’s downfall were intended to hide debt and inflate profits. Several Senate and House lawmakers have indicated they are having a tough time squaring Skilling’s testimony with the facts uncovered by congressional investigators so far.

In a related development, Rep. William Pascrell Jr. (D-NJ) has called for the resignation of FERC Chairman Pat Wood, saying that Lay’s influence over the appointment of Wood to the Commission last year has “irreversibly compromised” the integrity of the agency.

Given Lay’s hand in Wood’s appointment to FERC, “it is apparent that your ability to fairly and neutrally oversee the country’s energy policies have been irrevocably compromised,” Pascrell said in a Feb. 8 letter to Wood, urging him to “immediately step down” as FERC chairman.

Disclosures coming out of the congressional hearings make it “clear that the relationship between the FERC and Enron is unacceptably intertwined to serve the public’s interest,” he wrote. Pascrell further charged that Curtis Hebert Jr., Wood’s predecessor as chairman, was replaced by President Bush because he “refused to promote Enron Corp.’s agenda through the FERC.”

The White House confirmed that it received a letter from Lay recommending the appointments of both Wood, a former Texas regulator, and Commissioner Nora Mead Brownwell, a former Pennsylvania regulator, to FERC.

While Pascrell is the first congressman to call for Wood’s resignation, other lawmakers such as Sen. Barbara Boxer (D-CA) are looking into the close ties between Enron and the Commission. “I…want to know who Enron spoke to at FERC,” she said at Tuesday’s Senate committee hearing. She noted she hasn’t obtained the information that she is seeking from the Commission, despite the agency’s assurances that it is forthcoming.

Both Pascrell and Boxer have been critical of FERC in the past. Pascrell opposed the Commission’s decision to approve the MarketLink pipeline project through northern New Jersey in the face of citizen opposition. Boxer continues to fault FERC for its action in California during the energy crisis.

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