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Ken Lay not to testify before US Congress

The first Congressional hearing into Enron Corp's collapse begins Wednesday with top officials declining to testify before two panels of the House Financial Services Committee.

Congressman Michael G Oxley, Committee chairman, confirmed that Enron chairman and chief executive Kenneth Lay turned down a request to appear Wednesday.

The committee has subpoena powers. It is not clear whether it will exercise that to summon the reluctant witnesses. Oxley said: "I don't think they want to, or are not prepared to answer some very pointed questions about what went wrong."

Enron responded that the Congressional inquiry would take a back seat for now to its efforts to keep its energy trading business alive with financial support it is seeking from banks and potential partners.

The House Energy and Commerce Committee, which is also probing Enron's collapse, said it is trying to locate Andrew Fastow, financial officer of Enron who was instrumental in creating a series of questionable investment partnerships backed by Enron that allowed the company to move billons of dollars in liabilities off its balance sheet.

Fastow received $30 million from the partnerships in addition to his Enron salary and incentive stock grants. He was forced to resign in October. Fastow's attorney Craig Smyser, said that Fastow "is not out and about" because "he is getting death threats."

The Securities and Exchange Commission is investigating Enron's October disclosure that it had overstated earnings by $586 million over four years because of accounting errors.

The commission is also probing Enron's accountant, Arthur Andersen.

The committee, however, is scheduled to take testimony from Joseph Berardino, chief executive of Arthur Andersen, and Robert Herdman, SEC (Securities and Exchange Commission) chief accountant.

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