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Enron skips Calif hearing, may face contempt charges

Enron skipped a California Senate panel hearing on Wednesday investigating document destruction, ignoring a subpoena and making it likely the beleaguered energy giant will face contempt charges.

Sen Joe Dunn, chairman of a panel investigating possible price gouging in the state during last year's power crisis, said Enron failed to attend the hearing into document destruction by Enron's former auditor Andersen.

Dunn added that Enron has also failed to comply with the panel's separate June subpoena seeking thousands of documents related to the probe, spurring the Democrat to schedule hearings on Tuesday to consider two different contempt charges.

The subpoena had required Enron to send whoever was most knowledgeable about the issue in question, Dunn said.

The penalties for contempt range from fines to losing a business license to jail time for individuals who refuse to testify, Dunn said.

"Barring a huge change in Enron behavior over the next few days I expect to commence contempt proceedings against Enron for two separate and distinct issues," Dunn said. "First, their failure to appear at today's deposition without legitimate explanation, and second we are going to review their compliance with the actual document production."

The panel is seeking financial information and other data from Enron and a handful of other energy firms to determine whether power providers unfairly blocked competition and caused prices to soar during an electricity crisis which also brought rolling blackouts and bankrupted the state's biggest utility.

In January, as the Enron scandal grew amid revelations that the energy firm as well as its auditor had destroyed some documents, the panel issued the subpoena to testify at Wednesday's hearing.

The committee has also subpoenaed Anderson in an attempt to shed light on whether any destroyed documents related to the state's investigation, the senator said.

But an Enron official told the committee on Wednesday it would not be sending anyone to testify, saying nobody at the firm had the information the panel wanted.

"Enron does not know of any Enron employee with knowledge of documents destroyed by Arthur Andersen, which is clearly the subject of the deposition subpoena," the firm's vice president Richard Sanders said in a letter to the Senator. "We are not aware of anyone from Enron who made inquiries to Arthur Andersen regarding what documents were destroyed."

The state's investigation comes as Attorney General Bill Lockyer conducts a similar energy probe in which he received a court order last month requiring Enron to preserve all paper and electronic documents subpoenaed by state officials.

Enron's problems in California, however, pale in comparison to the treatment it is receiving in Washington where congressional committees, the Justice Department and the Securities and Exchange Commission are all probing the firm's demise. Enron's bankruptcy filing on Decemebr 2 was the largest in US history.

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