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Independent Prosecutor Needed For Enron Case, Senator Says

By Elaine S. Povich
NEWSDAY -- WASHINGTON

The chairman of the Senate Commerce Committee said Monday that former Enron chief executive Kenneth Lay will be subpoenaed to appear next week before the panel, and he called for an independent prosecutor to investigate the company, saying the Bush administration is too close to the bankrupt firm.

“This is a culture of government corruption. I’ve never seen a better example of cash-and-carry government than this Bush administration and Enron,” said Sen. Ernest Hollings, D-S.C. “I think we ought to have a special prosecutor.”

Lay resigned Monday night from the Enron board of directors, severing his last tie to the company.

Lay had been scheduled to testify before the panel Monday, but he changed his mind late Sunday, citing statements made by committee members in media appearances. His attorney, Earl Silbert, charged in a letter to the panel that “conclusions have been reached” ahead of Lay’s testimony. Silbert did not respond to repeated telephone calls Monday.

“I think it would have been difficult to come and testify,” said Sen. Byron Dorgan, D-N.D., chairman of a Commerce Committee panel that was scheduled to hear from Lay. “But he never should have expected it would be a walk in the park.”

The Commerce Committee scheduled a vote Tuesday to authorize the subpoena to Lay to appear next Tuesday.

Dorgan charged that Lay reneged on his pledge to come before the committee Monday after an internal report, written by Enron board member and University of Texas Law School Dean William Powers, that criticized Lay for his inattention to Enron’s intricate web of businesses.

In testimony before a House committee Monday, Powers said his inquiry “found a systematic and pervasive attempt by Enron’s management to misrepresent the company’s financial condition.”

“There’s no question that virtually everyone from the board of directors down” knew that interlinked partnerships were used to “offset its investment losses with its own stock,” Powers said in his prepared statement.

The devastating report may have an impact on other Enron officials who have been asked to testify to Congress. Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, which has scheduled a hearing Thursday, has said that he expects Enron’s former chief financial officer to refuse to testify, but that the company’s former chief executive would appear.