Committee will vote on subpoena for Enron's Lay

WASHINGTON -- A Senate panel prepared to subpoena former Enron chairman Kenneth Lay after he refused to appear Monday, and an investigator into Enron's collapse said virtually everyone from top management down knew Enron was hiding financial losses.

The Senate Commerce Committee plans to vote on a subpoena this morning -- 24 hours after Lay had been scheduled to testify before two congressional committees on the largest bankruptcy in the nation's history.

A House subcommittee set the stage for its own subpoena to demand Lay's appearance. The Financial Services subcommittee began its hearing into the Enron collapse Monday.

Lay abruptly canceled his scheduled appearances before the panels on the eve of the hearings.

Began at the top

In testimony for the House panel, William C. Powers, the dean of the University of Texas Law School, said his investigation into Enron's activities found "a systematic and pervasive attempt by Enron's management to misrepresent the company's financial condition."

Powers summarized his report, released over the weekend, and told lawmakers: "There's no question that virtually everyone from the board of directors down" understood that Enron's use of its partnerships was to "offset its investment losses with its own stock."

There was a "default of leadership and management" that began at the top, including Lay and former Enron chief operating officer Jeff Skilling, while Enron's board of directors "failed ... to provide leadership and oversight."

The House subcommittee voted to authorize, if necessary, a subpoena directing Lay to testify.