On the advice of counsel, former Enron Corp. Chairman Kenneth Lay will exercise his Fifth Amendment right not to testify before a Senate hearing today, his spokeswoman said Sunday. The Senate Commerce, Science and Transportation Committee subpoenaed Lay last week after he decided not to voluntarily testify before a subcommittee hearing investigating Enron’s bankruptcy.

Lay first was scheduled to testify last Monday, but he canceled the appearance apparently after listening to media accounts that led him to believe the hearings would have a “prosecutorial” tone. The subpoena that will bring Lay to the Senate today requires him to appear before the committee, but does not force him to testify.

If Lay refuses to testify, he will be one of many who have taken the Fifth in recent days before Senate members. Former Enron CEO Jeffrey Skilling told the committee last Thursday he thought the company was in good shape when he resigned for “personal reasons” last August. However, over the weekend, several senators present at the hearing expressed skepticism that Skilling was unaware of the details of Enron’s off-balance sheet transactions.

“Nobody does think he was telling the truth. I don’t believe he thinks so,” Sen. Ernest “Fritz” Hollings, (D-SC), said on CBS’ “Face the Nation.” Hollings is chairman of the committee.

Rep. James Greenwood, (R-PA), told CBS he “wanted to believe” Skilling but said he found his testimony to be untruthful. “When he came on, he was so earnest, and talked about the fact his best friend [former Enron executive J. Clifford Baxter] had committed suicide and he wanted to be open,” Greenwood said. “He came without need of a subpoena, he didn’t take the Fifth … but after that, he became non-credible. It was, ‘The dog ate my homework.'”

The chairman of the House Energy and Commerce Committee, Rep. Billy Tauzin, (R-LA), said Skilling “really thought he was smarter than everybody in Washington.” Tauzin’s committee also is investigating Enron’s collapse. “He really thought…he could come and just flamboozle us, just tell us anything he wanted and we would buy it,” Tauzin said. “I’m afraid he may have put himself in some legal jeopardy as a result.”

In other news, the U.S. Department of Labor said it has begun negotiating with Enron to remove the administrators overseeing Enron’s pension plans and replace them with independent overseers. Ann Combs, assistant secretary of the Pension and Welfare Benefits Administration, said in a statement Sunday that federal officials hope to reach an agreement with Enron “without engaging in a lengthy court proceeding.”

However, if an agreement can’t be reached “in the very near future,” the Labor department will seek a court order to replace the pension plan administrators, Combs said. Combs said the department’s objective is to replace the administrative committees now overseeing Enron’s pension plans with independent experts who are “experienced in protecting the interest of participants and beneficiaries in complex pension plans like Enron’s.”

Many employees who had invested most or all of their retirement funds in Enron stock were financially devastated when the company stock tumbled and the company declared bankruptcy. Enron’s free fall occurred at the same time the administrator for the company’s retirement plans was changed, and employees were prevented from selling their stock for about three weeks.

Finally, current Enron Chief Risk Officer Richard B. Buy, who pleaded the Fifth before Congress last week, apparently is negotiating with the court so that he can resign from Enron. Although Buy did not testify last week, Skilling claimed in his testimony that it was the responsibility of Buy and Chief Accounting Officer Richard Causey to approve the dubious partnership deals, and to ensure they were arms-length transactions and that proper controls were in place. Buy apparently signed a lucrative sign-on bonus to remain at Enron through its bankruptcy transition, and if he leaves without the court’s permission, he may have to pay a penalty against the bonus clause.

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