Senators now expect ex-Enron chief Lay to testify next week

Saturday, February 9, 2002

WASHINGTON -- Former Enron chairman Kenneth Lay could testify at a Senate hearing Tuesday, a week after pulling out of two scheduled appearances when some in Congress suggested he had engaged in criminal activity.

Lay's spokeswoman said Friday he hadn't decided what to do about his scheduled testimony, but Sen. Byron Dorgan sounded optimistic that Lay would answer questions.

It is customary for witnesses to inform a congressional panel if they intend to invoke their Fifth Amendment right against self-incrimination and "they are not doing so at this point," said Dorgan, citing discussions between lawyers for Lay and the Senate Commerce Committee.

"Ken Lay is still weighing his options for how he will handle the hearing on Tuesday," said spokeswoman Kelly Kimberly.

Lay decided last Sunday not to testify at two scheduled congressional hearings, after a number of comments by senators and House members on TV talk shows about alleged criminality, including one that Lay had to know Enron was a giant pyramid scheme.

Serious consequences

Meanwhile, legal experts said that Thursday's House testimony by former Enron chief executive officer Jeff Skilling could have serious legal consequences.

In a three-hour appearance before a House subcommittee, Skilling said he knew few details about the web of partnerships that brought the company to ruin, and the former CEO insisted he was never warned of problems with the partnerships.

Skilling was contradicted by Enron treasurer Jeff McMahon and was questioned by congressmen who said they didn't believe Skilling's story. The former CEO said he was unaware Enron was using the off-the-books partnerships to "conceal liabilities or inflate profitability."

The partnerships kept hundreds of millions of dollars in debt off the company's balance sheet.

In another development Friday, the Pentagon disclosed that it is one of the federal agencies along with the White House that the Justice Department has directed must preserve all Enron-related documents. The department's Feb. 1 letter requests the Pentagon general counsel's assistance in preserving all records "which relate in any way to Enron's financial condition and/or business interests."

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