- WASHINGTON (Reuters) - Enron
Chairman Kenneth Lay may have misled employees by telling them he expected
the company's share price to go up just weeks before it started to collapse,
a high-ranking House Democrat says.
Henry Waxman, a California Democrat, has asked Lay to respond by January
18 to a series of questions involving e-mail messages "you purportedly
sent out to Enron employees about Enron's financial condition and stock
price in August 2001."
Waxman, the senior Democrat on the House Government Reform Committee, had
already been seeking information about contacts between the White House
and the now-bankrupt energy giant Enron.
Waxman asked Lay to verify whether he sent the e-mails and if so, whether
he was aware at the time of Enron's "financial vulnerabilities."
"If it is true that you sent these e-mails, then it appears that you
misled your employees into believing that Enron was prospering and that
its stock price would rise," Waxman wrote.
Waxman also asked Lay to provide records of Enron communications assessing
the value of Enron's stock price or financial condition.
"I also would like to know about your decision to prevent participants
in Enron's 401K plan from accessing their retirement accounts and selling
their plummeting Enron stock," Waxman wrote.
He said he received copies of the e-mails as part of his investigation
of the collapse of Enron. His office released the e-mails along with Waxman's
letter on Saturday.
"As I mentioned at the employee meeting, one of my highest priorities
is to restore investor confidence in Enron," reads one e-mail, dated
August 8 and carrying a return address from "ken.lay@enron.com".
"This should result in a significantly higher stock price."
The e-mail, whose recipient's name is blanked out, offers a stock grant
of $36.88 a share. Enron shares were at 67 cents a share on Friday.
But Waxman said that at the time the e-mail was sent, Enron's stock price
was $37, and "you had already sold $40 million of Enron stock during
2001 and over $100 million since October 1998."
Waxman noted that the price of Enron stock eventually fell to a low of
26 cents a share on Nov. 30, 2001.
Quoting from another e-mail, Waxman said that on August 14, "the day
that Jeffrey Skilling resigned as (Enron) CEO, you stated, 'I want to assure
you (employees) that I have never felt better about prospects for the company.'"
"Our performance has never been stronger; our business model has never
been more robust; our growth has never been more certain; and most importantly,
we have never had a better nor deeper pool of talent throughout the company,"
the August 14 e-mail reads.
"We have the finest organisation in American business today."
Robert Bennett, the Washington-based attorney for Enron, was not available
for comment Saturday.
Several congressional committees are investigating Enron's collapse last
year. The bankruptcy and the political storm surrounding it has prompted
President George W. Bush to order a Treasury Department review of U.S.
pension and corporate disclosure rules.
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