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American Morning

Interview of Representative James Greenwood

Aired February 07, 2002 - 09:19   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.
PAULA ZAHN, CNN ANCHOR: As we have been reporting this morning, a handful of key players from the bankrupt energy giant are expected to appear at a House hearing today, but some of them aren't expecting to say a whole lot.

Joining me now from Capitol Hill, Pennsylvania Congressman James Greenwood, chairman of the House subcommittee holding those hearings today -- welcome, sir.

REP. JAMES GREENWOOD (R), PENNSYLVANIA: Good morning. Good to be with you, Paula.

ZAHN: Thank you. So, can you quickly run through the list of who you expect to take the Fifth, and who might ultimately testify?

GREENWOOD: Well, Andy Fastow, the former CFO, who was the primary architect of these off-the-book transactions, he'll be there, he'll take the Fifth, I'm quite certain, and leave. Michael Kopper, his sort of cohort, who -- Fastow walked away with 30 million, Kopper walked away with about 10, these are just on the off-books transactions. He'll take the Fifth.

We were disappointed to learn that Mr. Causey and Buy, high placed officials at Enron who we expected to testify, will also take the Fifth. But we will still have plenty of witnesses who will talk, and talk at length, and among -- chief among them is probably Mr. Skilling, who was the CEO and president of Enron and much of the -- those who are paying attention -- many of those who are paying attention to the story are really very, very eager to hear what Mr. Skilling has to say.

ZAHN: Why is he so eager to talk when his other colleagues are not?

GREENWOOD: Well, that's a huge question. I'm sure if you ask that question of him, he will say that it is because he did nothing wrong. He will say, it is because he thought that the transactions, as they were structured, were good for the company. To the extent that there was wrongdoing, he will probably tell us that he was unaware of it. His sort of theory for what happened to Enron was that it was kind of a "Perfect Storm" phenomenon, that everything was going right, and then just these unpredictable events converged and took the company down. There are others who say that the reason that Mr. Skilling is so eager -- or willing to come is because he's an extremely bright guy. Very able, some might say arrogant, I have not met the man, and that he can basically dance between the bullets. So it should be interesting.

ZAHN: Another key witness you are expected to hear from today is a man named Jordan Mintz. He, I guess, was a former general counsel for Enron.

GREENWOOD: That's right.

ZAHN: And the "New York Times" actually released a memo today where I -- apparently, Mr. Mintz had warned officers of Enron of -- a year before the company collapsed, that there was going to be a domino effect. What is the significance of this memo, and is that -- just the release of the memo the reason why a lot of these other Enron people are not going to testify? Is that damaging?

GREENWOOD: Well, no, because they made the decisions not to testify before we released the document last night. Causey and Buy decided to take the Fifth probably because they switched lawyers suddenly within the last 24 hours, and that caused that change, but this memo is critical because it goes to the question of who knew what when.

There are top officials at Enron, of course, not the least of whom is Ken Lay, who have said, gee, we didn't know this was going on. These guys were rogues, they were on their own, but as our investigation proceeds, we learn more and more that there were red flags raised innumerable ways. All the way to the top, to Mr. Lay's attention, and to Mr. Skilling's attention early on, and so we're very curious to see whether these folks were actually dumb as they say they were, or dumb like foxes.

ZAHN: In the end, do you think we will see criminal convictions here?

GREENWOOD: I would not be surprised, of course that's not our function. That's the function of the Justice Department, but if you connect the dots, I mean, the dots that were made apparent in the powers report are that the books were cooked. That everybody knew the books were cooked who should have known, and it is illegal to cook the books in that way.

When you connect -- now, they didn't conclude -- Powers didn't conclude it was criminal behavior, but when you connect those dots, it looks pretty darn criminal, and when you have as many folks as we've had now, both at Andersen, with Mr. Duncan, and now at least four coming from Enron, and then Ken Lay, probably the Fifth to take the Fifth, it's hard to imagine that people would be so worried about incriminating themselves if they didn't have some fear that, in fact, they had broken the law.

ZAHN: We have heard about Global Crossings going bankrupt, and turbulence in other companies. What is it that you want the American public to learn as they wade through this Enron mess?

GREENWOOD: That's a very excellent question, and it really is very central. This is a tragedy because the biggest company in the country went bankrupt. It is a tragedy because 4,000 people had their hopes dashed in terms of their employment and their retirement. It is a tragedy certainly because Mr. Baxter committed suicide over. It is a tragedy because Americans have lost some confidence in the stock market, and in the honesty of the information that's available to them in order to make their investment choices.

We need to restore confidence in the market here, not only for the current economic situation, but because we want to look at social security issues, and then ultimately, if we're telling the world follow us, follow our lead, free markets work, we need to show that we can reform what's wrong with our system when we find out about it.

ZAHN: Well you got a big day ahead of you. Representative Greenwood, I know your hearings have now been moved back a half hour. We will be carrying them live.

GREENWOOD: Well, you see, that's news to me.

ZAHN: Oh, it is?

GREENWOOD: I just came from the prayer breakfast, so you're ahead of me.

ZAHN: You got 35 minutes to blow before the hearings get underway.

GREENWOOD: Oh good, all right, great.

ZAHN: Good luck to you, sir. Thank you again. Representative Greenwood, who will head up those hearings a little bit later on this morning.

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