[Congressional Record (Bound Edition), Volume 152 (2006), Part 7]
[Senate]
[Page 9877]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         THE ENRON CONVICTIONS

  Mr. LEVIN. Mr. President, 5 years ago, the Enron Corporation, the 
seventh largest publicly traded corporation in America with a $100 
billion in annual revenue, collapsed. Its sudden plunge into bankruptcy 
destroyed the savings of thousands, eliminated the jobs of tens of 
thousands more, and, more fundamentally, damaged Americans' faith in 
U.S. capital markets. In the years following, the extent of Enron's 
misconduct became clear--the dishonest accounting, nonpayment of taxes, 
excessive executive compensation, collusion with banks and brokers, the 
lies to the investing public and their own employees.
  Many Enron executives have since pleaded guilty and accepted 
responsibility for their role in the Enron disaster. Enron's two most 
senior executives, however, did not. They spent the last 5 years 
denying responsibility and fighting all efforts to hold them 
accountable. But yesterday, a jury found Ken Lay and Jeffrey Skilling 
guilty of 25 counts of securities fraud, wire fraud, false statements, 
and other misconduct. The jury held both men accountable for Enron's 
misdeeds.
  Some want to portray those convictions as the end of an era of 
corporate corruption. They are already urging Congress to weaken the 
Sarbanes-Oxley Act, the law enacted to prevent future Enron 
catastrophes. For example, they want to exempt 80 percent the publicly 
traded companies from rules requiring internal controls to ensure that 
their books accurately reflect their finances. They want to weaken or 
eliminate the Public Company Accounting Oversight Board that now 
polices the accounting industry. They want to weaken other corporate 
reforms as well, from rules requiring oversight of hedge funds to rules 
requiring mutual funds to have independent directors.
  But corporate corruption is not over. Just this year, AIG, one of the 
country's largest financial firms, agreed to pay $1.6 billion to settte 
State and Federal allegations of securities fraud and bid-rigging. 
Fannie Mae, an American symbol of financial success and affordable 
housing, paid $400 million to settle allegations of accounting fraud. 
In April, the former chief executive of Computer Associates, a leading 
high tech company, pled guilty to securities fraud and obstruction of 
justice. Another 20 publicly traded corporations are currently under 
investigation for playing games with the timing of stock option grants 
to maximize the profits that their top executives could pocket. The 
list, unfortunately, goes on.
  The message that should be taken from the Enron convictions is not 
that corporate oversight is too tough, but that corporate executives 
must and can be held accountable when they misuse funds, abuse their 
positions, and mislead the investing public.
  I am told that some corporations are waiting for my good friend, Paul 
Sarbanes to leave the Senate before attacking the law that he 
championed. They want him out of the way first. But my friend fought 
too hard and too long for the corporate reforms embodied in Sarbanes-
Oxley to be tossed aside or watered down. This country cannot afford 
more Enrons, and I, for one, believe the Senate cannot and will not 
turn back the clock on corporate oversight.

                          ____________________