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Thursday, 13 December, 2001, 10:51 GMT
Enron chiefs under fire
Enron offices
The hearing is one of several into the collapse
Enron chiefs have come under fire for enriching themselves while their company became increasingly indebted.

Lawmakers at the first day of a Congressional hearing heaped criticism onto the firm's senior management, saying they were involved in insider trading and slick financial gimmicks while running the company into the ground.

Thousands of former employees have lost their jobs and seen share options become virtually worthless after the firm filed for bankruptcy on 2 December.

Enron was once the seventh biggest firm in the US and its rapid downfall is one of the most dramatic corporate collapses ever.

Congress will continue its investigation into the failure of Enron on Thursday.

Absent executives

Enron chairman and chief executive Kenneth Lay - formerly an adviser to George Bush on energy policy - has declined to attend the hearings.

No Enron officials attended the meeting but may still be forced to appear.

Kenneth Lay, Enron
Kenneth Lay declined to attend
Enron executives were "just having too much fun" said the chairman of the capital markets panel, Richard Baker, adding they cashed out more than $1bn in company stock while other employees were barred from selling when Enron's share price plunged.

Security regulators are also trying to take Andrew Fastow, Enron's former chief financial officer, to court to force answers on the firm's murky finances.

Mr Fastow was ousted from the firm as details emerged of a large hole in the company's balance sheet and a clear conflict of interests.

He failed to answer a subpoena issued on 31 October, prompting press rumours that he had fled the country.

But he made a brief appearance with his lawyer on Wednesday who said that he will reschedule his meeting with the regulators.

Multiple investigations

Enron also faces investigation by the Justice Department while the US Labor Department will look at how Enron handled its employees' retirement pension plans.

It has been under investigation by the Securities Exchange Commission (SEC) since October.

Enron's accounting practice, possible violation of securities law and the company's handling of its employees' retirement investment plans are all under scrutiny.

The Congress hearing also questioned Enron's auditors, Andersen, about why they did not know that the company was inflating its profits.

Andersen alleged that the company withheld "critical information" from them.

The hearing is designed to help Congress and the public "understand as best as we can what structurally went wrong, what mistakes were made and what mistakes were not noticed", committee chairman Republican Michael Oxley said.

The BBC's Duncan Bartlett
"Andrew Fastow of Enron was one of the most respected businessmen in America"
See also:

12 Dec 01 | Business
Enron to start $6bn sell-off
08 Dec 01 | Business
Enron chiefs sued for $25bn
03 Dec 01 | Business
Enron files for bankruptcy
09 Nov 01 | Business
Enron admits inflating profits
05 Dec 01 | Business
Enron debacle forces audit rethink
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