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Wednesday, 22 May, 2002, 18:07 GMT 19:07 UK
White House gets Enron subpoena
A US senate committee has voted to subpoena documents on the White House's links with bankrupt energy giant Enron.


We are perplexed as to why (Senator Lieberman) chose to pursue this confrontational approach rather than working cooperatively with the White House

White House spokeswoman
The Senate Governmental Affairs Committee, one of several congressional panels investigating the Enron affair, voted by a nine-eight majority to use the subpoena powers.

The vote, split along party lines, ups the ante in the Senate's investigation into links between the Bush administration and Enron.

If the committee's use of subpoena powers is backed by the courts, the White House would be legally obliged to disclose details of its dealings with the bankrupt energy trader.

Democratic Senator Joseph Lieberman, the committee's chairman, said the White House had not responded quickly enough to requests for information.

"The Committee has no choice but to subpoena the requested material," he said.

"I have finally concluded that we were being slow-walked at least or stonewalled at worst."

Campaign contributions

Enron, one of the US' most high-profile corporate success stories of the 1990s, filed for bankruptcy protection late last year after it emerged it had hidden millions of dollars in debt using a complex series of external financial partnerships.

Enron's bankruptcy, the biggest in US corporate history, left investors nursing heavy losses and wiped out many former Enron employees' retirement savings.

The company was a major donor to President George W. Bush's 2000 presidential campaign.

The Bush administration, known for its ties with the energy industry, has admitted that Enron chairman Kenneth Lay made phone calls to senior government officials late last year as the company neared bankruptcy.

One strand of the committee's investigation has focused on why federal regulators did not detect the company's irregular financial practices sooner.

White House protests

A White House spokeswoman described the subpoena as "unnecessary."

"We are perplexed as to why (Senator Lieberman) chose to pursue this confrontational approach rather than working cooperatively with the White House," she said.

Earlier this week, the White House signalled that it was prepared to hand over a batch of Enron-related material, and asked the committee to hold off using the subpoena option.

The spokeswoman said officials had not yet decided whether to challenge the senate subpoena.

Fall-out

Enron's collapse sent shock waves through US financial markets, with investors dumping shares in any company using less than transparent accounting procedures.

It also damaged the reputation of the global accounting giant Andersen, which had failed to spot any irregularities while auditing Enron's accounts.

Andersen's US audit partnership is currently defending itself against criminal charges stemming from the destruction of Enron-related documents by some of its executives.

The Enron affair prompted an overhaul of the accounting industry, with most major firms splitting their consulting divisions from their audit practices.

It has been alleged that Andersen's audit of Enron was compromised by the hefty fees the energy giant was paying its consultancy arm.


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23 May 02 | Americas
20 May 02 | Business
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07 May 02 | Business
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