Cliff Stearns :: Enron

Congressman Stearns is active in Congressional hearings on the collapse of Enron. He participated in the January 24, 2002, hearing on the destruction of Enron-related documents by Arthur Andersen and he will hold his own hearing and join in on others in the future.
Get more information about the problem of Proforma Accounting Practices - Click Here

Stearns questions witnesses about the destruction of documents.

The Honorable Cliff Stearns Opening Statement
The Destruction of Enron-related Documents by Andersen Personnel Subcommittee on Oversight and Investigations
January 24, 2002

As we know, this hearing is only the beginning as our Committee and others both on the House and Senate examine what exactly caused the largest Chapter 11 filing in history. This hearing focuses on the destruction of documents, an allegation that will carry serious implications should deliberate wrongdoing be discovered. We are charged with the duty to investigate fraudulent practices by companies and agencies. Our constituents demand that action. These allegations of document destruction are serious as such action impedes our investigation, as well as the investigations of others. I feel that I am not alone in saying that a person will fare better in cooperating with this Committee's investigation as opposed to subverting our efforts. We must have the answers needed so a billion dollar bilking of investors, employees will not be repeated.

Florida's state pension fund incurred a loss to the tune of $300 million. Individual constituents have called to render their complaints at losing their retirement savings from their 401(k) accounts. And I have promised, as my colleagues on both sides have, to do everything possible to get to the bottom of this matter and prevent a future occurrence.

I look forward to hearing the testimony from our witnesses. I have to say that I am angered that a previously reputable company, Arthur Andersen, is the reason we are holding this hearing today. It is my understanding that a memo from February, 2001, detailed Andersen's concerns with Enron and whether that company's dealings would harm Andersen's reputation.

Well, I believe I can unequivocally state that Andersen's now wounded reputation was self-inflicted. I look forward to finding out whether or not these documents were destroyed in anticipation of an SEC investigation. In particular I'm very interested in Andersen's document retention policy.

Mr. David Duncan, the Former Andersen Partner in Charge, is alleged to have ordered the expedited destruction of Enron related documents. One of our other witnesses, Ms. Temple, prior to the document destruction, emailed a "reminder" of Andersen's document retention policy.

The Oversight and Investigations Subcommittee holds hearing on destruction of Enron-related documents by Arthur Andersen employees.

If all employees are to abide by Andersen's document retention policy, why make the concerted effort to "remind" employees to comply with such policy. What is the reasoning behind this? I'm beginning to wonder whether Mr. Duncan may be the scapegoat in these actions. For it seems, maybe, an implicit order was given to destroy documents, yet backsides were covered through the "reminder" email on document retention.

Kind of sounds like a "Code Red". I'm sure many here remember the questioning of "Colonel Nathan Jessup" in the movie "A Few Good Men." A scene where he had given an explicit order that Private Santiago was not to be harmed, yet, gave a "Code Red," a term that did not appear in any manual, or standard operating procedure, yet carried specific actions once given.

Now, I doubt we will receive the same kind of colorful testimony as exhibited in that movie scene, but nonetheless, this Committee is entitled to the truth.

Mr. Chairman, I want to thank your for this hearing. I would also like to note that beyond the issue of document destruction, there are larger issues in which this Committee will delve in the coming weeks. In particular, as Chairman of the Subcommittee with jurisdiction over the Financial Accounting Standards Board, I would like to know if our accounting standards are responsive to today's challenges posed by increasingly complex business and financial transactions, or are companies, like Enron, simply ignoring these standards and placing investors at risk?

I look forward to working with Chairman Tauzin, and my committee colleagues in answering these and the myriad of additional questions surrounding this investigation.

Witnesses from Arthur Andersen testify before the Subcommittee