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American Morning
Enron's Auditor Says It Destroyed Documents Related to Case
Aired January 11, 2002 - 07:37 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Let's go back to the story of Enron for a moment. The "Wall Street Journal" this morning, they have said it best -- quote -- "The storm cloud hanging over Enron and its long- time auditor, Arthur Andersen, just got darker" -- unquote.
The company's auditor says it destroyed documents related to the case. The attorney general, John Ashcroft, says he can't take part in the investigation. He has a conflict of interest. Enron executives talked to two members of the president's cabinet just before the company collapsed.
CNN's senior correspondent Brooks Jackson joins us now from Washington with a detailed look at the timeline of the fall of an energy giant -- Brooks, good to have you with us.
BROOKS JACKSON, CNN SENIOR CORRESPONDENT: Good morning, Jack. Yes, those developments, just a flurry of them here in the last 24 hours. You mentioned the Arthur Andersen destruction of documents. Potentially the most serious new development, the Securities and Exchange Commission took the unusual step of saying they consider this extremely serious. And, boy, are they right, because if any of those documents were destroyed after investigations began, it could be criminal obstruction of justice.
As for Attorney General John Ashcroft's stepping aside, Democrats are saying he did the right thing in doing that. He got something like $57,000 in campaign contributions from Enron for his senate campaign, before he was attorney general. Also, many attorneys in the U.S. Attorney's Office in Houston are stepping aside. A lot of them have family ties to Enron executives and Enron employees. That's, of course, where Enron is headquartered. Some of the family members even lost money in 401Ks down there. So it's -- the Justice Department is still sorting out exactly who is going to be conducting this criminal investigation.
Those contacts with the White House -- or rather with the Bush administration are interesting. Secretary O'Neill got two calls from Ken Lay, the Enron chairman. O'Neill says those were just informational calls. He wasn't asked for any help. But Commerce Secretary Don Evans is saying that he was told by Lay that Lay would welcome any help in preserving Enron's bond rating with Moody's. Now -- and Lay's attorney is saying that he didn't ask for help. In any case, no help was forthcoming, and the White House says they weren't informed of this and that Lay and -- or excuse me -- that O'Neill and Don Evans did the right thing.
Latest development today: 51 subpoenas are going out from the Permanent Subcommittee on Investigations of the U.S. Senate. Lay will get a subpoena. Other Enron and Arthur Andersen officials will get a subpoena, all of the board members for the last several years of Enron, including -- and this is very unusual -- wife of U.S. Senator Phil Gramm -- Wendy Gramm, who was on the board and on the audit committee of Enron -- Jack.
CAFFERTY: Unbelievable. And of course, lost in all of this discussion -- not yours and mine -- but in the discussion about Enron in general is the fact that so many small investors and employees of the company lost their life savings.
Brooks, we've got to move along. I thank you for that report very much -- Brooks Jackson joining us from Washington.
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