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Enron chief summoned after refusing to testify
WASHINGTON — A Senate panel prepared to subpoena former Enron Chairman Kenneth Lay after he refused to appear yesterday, and an investigator into Enron's collapse said virtually everyone from top management down knew that Enron was hiding financial losses.
The Associated Press
The Senate Commerce Committee plans to vote on a subpoena today — 24 hours after Lay had been scheduled to testify before two congressional committees on the largest bankruptcy in the nation's history.
A House subcommittee set the stage for its own subpoena to demand Lay's appearance if necessary. The Financial Services subcommittee began its hearing into the Enron collapse yesterday. Lay abruptly canceled his scheduled appearances before the panels on the eve of the hearings.
In testimony prepared for the House panel, William C. Powers, the dean of the University of Texas Law School, said his investigation into Enron's activities found "a systematic and pervasive attempt by Enron's management to misrepresent the company's financial condition."
The House subcommittee voted unanimously to authorize, if necessary, a subpoena directing Lay to testify, but for the time being held off further action.
In the Senate, Byron Dorgan, D-N.D., said at a news conference, "We decided that we really had no choice but to issue a subpoena." Lay "should not have expected it would ever be a walk in the
park" to testify at a congressional hearing, he said. Dorgan acknowledged Lay's Fifth Amendment right to refuse to answer questions when he does appear.
"These inflammatory statements show that ... the tenor of the hearing will be prosecutorial," Silbert said.
Lay canceled his Senate testimony after several senators and House members suggested on Sunday news shows that he and other company executives engaged in criminal acts.
On Saturday, Powers' Enron-authorized review of several of the company's estimated 3,000 off-the-books partnerships found that the energy trader's management concealed financial information from the public.
"What we found was appalling." Powers said in testimony prepared for yesterday's hearing. "...This is a tragedy that could and should have been avoided."
Enron's former chief financial officer, Andrew Fastow, and ex-Enron executive Michael Kopper have indicated they will refuse to answer questions from Congress. Arthur Andersen auditor David Duncan, fired for his role in document shredding, invoked his Fifth Amendment right not to testify Jan. 24.
Andersen was accused in the report of facilitating a series of complicated transactions aimed at helping Enron conceal big losses and debts. Andersen announced Sunday that former Federal Reserve Chairman Paul A. Volcker would head an effort to overhaul the firm's practices.
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Bush calls for more tax cuts
The Associated Press
WASHINGTON — President Bush renewed his appeal for an economic stimulus package yesterday as part of his 2003 budget that proposes $591 billion in new tax reductions, including a permanent extension of last year's big tax cut.
The Bush administration is endorsing elements of a House-passed plan that would accelerate income tax cuts now set to take effect in future years and provide a new round of rebate checks of up to $600 aimed at lower-income Americans.
The president also is proposing a range of tax credits or other breaks for health insurance, charitable giving, education, energy conservation and business research and development.
"Unless economic growth can be restored, it will mean fewer jobs, smaller growth in incomes and smaller budget surpluses," budget documents state.
The House measure also would extend unemployment benefits by 13 weeks, help laid-off workers pay for health insurance and allow corporations and small businesses more generous tax breaks for new investment. The Bush plan does not include repeal of the corporate alternative minimum tax — which ensures companies pay at least some taxes — that the president pushed last year.
The budget estimates that the tax cuts and new spending combined would provide $89 billion in economic stimulus in 2002 and $73 billion in 2003.
The biggest tax relief item in the new budget is the $344 billion included for the first years of a permanent extension of the 10-year, $1.35 trillion tax cut enacted last year. That tax cut is now set to expire at the end of 2010 — meaning millions of people could face a huge tax increase without the extension.
needs to be a stimulus package, but they think it really needs to provide stimulus," said Ranit Schmelzer, spokeswoman for Senate Majority Leader Tom Daschle. D-S.D.
The Democratic-led Senate is debating a leaner stimulus package. With Republicans holding out for more, an agreement remains uncertain.
"Democrats think there
Palestinians seek diplomatic aid
The Associated Press
WASHINGTON — A top Palestinian official called on Secretary of State Colin Powell yesterday, seeking assurances the Bush administration will not sever diplomatic contact with Yasser Arafat.
Ahmed Qureia, speaker of the Palestinian parliament, met first with Assistant Secretary of State William Burns as European and Arab leaders tried to steer the administration to peacemaking amid the bloodshed.
With Ariel Sharon, the Israeli prime minister, due to meet with President Bush on Thursday, the administration continues to give its strong backing to Israel and to insist on action by Arafat
to stop Palestinian attacks.
"We don't believe we've seen a 100 percent effort." Condoleezza Rice, the president's national security adviser, said on Fox News Sunday.
Similarly, Powell said on CBS' Face the Nation that Arafat "has to do a lot more to get the violence under control."
But Powell has balanced his calls for more action by Arafat with assurances he will push for a Palestinian state on land held by Israel once the fighting slows down.
Powell also has countered advice to Bush from Vice President Dick Cheney and Pentagon officials to suspend contact with Arafat in light of the attacks.
So far, Bush has come down
on Powell's side. Sharon is expected to ask the president to break with Arafat, but not with the Palestinian Authority.
Typical of the Europeans' advice was a call by Javier Solana, director of foreign policy for the European Union, for an end to the Middle East stalemate.
Solana said the Palestinian Authority must "do the utmost to stop violence" and "the Israeli government has to begin to get engaged with some political perspective."
Yesterday, Lebanon's prime minister, Rafiq Hariri, urged the United States to reconsider its Mideast policies, saying American support for Israel was likely to destroy chances for peace between the Arabs and Israel.
Economic forum blasts U.S.
The Associated Press
NEW YORK — They came in solidarity to this terror-wounded city.
With the forum wrapping up its five-day session yesterday, some of the criticism has been simple scolding by non-Western leaders. But a large measure has come in public soul-searching by U.S. politicians and business leaders.
But since they arrived, speaker after speaker at the World Economic Forum has lambasted America as a smug superpower, too beholden to Israel at the expense of the Muslim world, and inattentive to the needs of poor countries or the advice of allies.
U. S. Sen. Hillary Clinton, D.N.Y., cited a global poll that characterized Americans as selfish and bent on arranging the global economy for their own benefit.
"We've not done our fair share to take on some of the global challenges" such as poverty, disease and women's rights, Clinton said Sunday. "We need to convince the U.S. public that this is a role that we have to play."
Microsoft Corp. Chairman Bill Gates warned that the terms of international trade were too favorable to the rich world, a disparity that feeds resentment.
"People who feel the world is tilted against them will spawn the kind of hatred that is very dangerous for all of us," Gates said. "I think it's a healthy sign that there are demonstrators in the streets. They are raising the question of, 'Is the rich world giving back enough?'"
Held in the Swiss ski resort of Davos in its first 31 years, sponsors decided to move this year's forum to New York to show support for the city after the Sept. 11 terror attacks.
About 2,700 corporate and political leaders, clergy and celebrities came to discuss the world's problems, and have spent much time dissecting U.S. foreign policy, its possible role in breeding terrorism and the potential harms of globalization.
Few protesters turned up Sunday near the Waldorf-Astoria hotel, site of the forum, on the fourth day of the conference. But mostly peaceful demonstrations miles from the hotel generated 159 arrests—the largest in a single day since the conference started.
The total arrested so far during the meeting grew to over 200, mostly for disorderly conduct. Two demonstrations were planned yesterday afternoon by a group promoting a wide range of causes, from environmental protection to the cancellation of developing countries' debts.
In a curious convergence, the titans of business and politics at the meeting have seized on many of the same socially liberal issues that they have been accused of ignoring at past gatherings.
The forum's agenda may have taken some of the steam out of street protests, which were sparse except for Saturday's turnout of about 7,000 demonstrators.