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Yet another congressional committee will issue subpoenas next week for corporate documents crucial to its inquiry into regulatory oversight of Enron Corp., two senators said Jan. 2. The Senate Governmental Affairs Committee became the fourth congressional panel to launch an Enron-related probe, joining the Justice and Labor departments and the Securities and Exchange Commission. And more could be coming. Democrats on the Senate Commerce Committee have asked the Federal Trade Commission to launch its own investigation. At a Capitol Hill news conference Wednesday, Sen. Joe Lieberman, the chairman of the Senate Governmental Affairs panel, said the committee will hold its first Enron-related hearing Jan. 24 to vet whether any “cracks” in the systems at various regulatory agencies, including the SEC, the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission, contributed to the company’s collapse. “This is a search for the truth, not a witch hunt,” said Lieberman, a Connecticut Democrat. Meanwhile, Sen. Carl Levin, D-Mich., chairman of the committee’s Permanent Subcommittee on Investigations, said he will subpoena documents next week from Enron’s current and former directors, top company officials and its auditor, Arthur Andersen. The subcommittee will examine how the energy giant was governed and audited and how it used special-purpose entities, offshore entities and limited partnerships to conduct its business. The subcommittee will spend the next few months gathering and analyzing the documentary trail, and hearings from those subpoenas will be held later in the year, Levin said at the news conference. The subcommittee “will use its subpoena authority to investigate what appears to be a massive shell game with multiple layers of conflicts of interests,” Levin said. “Thorough investigations are needed, and from different perspectives, to determine whether current law was violated and where current law is inadequate to protect the public interest,” he said. Lieberman said the Enron investigation will be a committee priority when it returns from recess later this month. That appears to be true for much of Congress as well as federal regulatory agencies. Since Enron’s bankruptcy filing Dec. 2, the Senate Commerce Committee, the House Financial Services Committee, the House Energy and Commerce Committee and now the Senate Governmental Affairs Committee have launched investigations. The SEC and Labor investigations could result in civil charges while the Justice Department’s inquiries could result in criminal charges. “We’ll do our best to coordinate with our colleagues,” Lieberman said. Levin said overlapping investigations do not worry him. “There is more than enough work for the House and the Senate,” Levin said after the news conference. “The problem is there is so much to look at that there may be some pieces not investigated. That’s my fear.” While Lieberman said the committee has not decided whether to ask Enron chairman Kenneth Lay or other company executives to testify, he did note that he “wouldn’t consider an investigation complete without hearing from them.” Levin said the subcommittee intends to take depositions where appropriate. Lay has previously declined to appear at congressional hearings but has committed to testifying before the Senate Commerce Committee in February. Meanwhile, late Wednesday, Andersen released a statement saying a review of its accounting and auditing quality “has been deemed to provide reasonable assurance of compliance with professional standards” and has been accepted by the Peer Review Committee of the American Institute of Certified Public Accountants. Deloitte & Touche conducted the review, which evaluated whether Andersen’s system of quality control for its accounting and auditing practice meets standards set by the AICPA. Firms are reviewed every three years, but Andersen’s review was expanded after financial reporting issues emerged at Enron, the firms said. In a comment letter, Deloitte & Touche recommended several changes Andersen should undertake but said those items “were not considered to be of sufficient significance to affect the opinion expressed in [the] report.” But the report doesn’t absolve Andersen. DT said the restatement of financial statements audited by a firm “generally involve numerous factors, many of which are unrelated to the effectiveness of a firm’s quality control system.” Copyright (c)2002 TDD, LLC. All rights reserved.

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