"This activity served to deceive the public about Enron's financial condition," Tauzin, R-La., said opening a hearing to probe the collapse of the former energy giant.
Tauzin also criticized Enron's auditor, saying Arthur Andersen "knew or should have discovered the fraudulent nature" of certain transactions with outside partnerships managed by former Enron Chief Financial Officer Andrew Fastow, Tauzin said, adding that "Enron's financial statements violated numerous existing accounting rules."
Citing deals known as the Raptor transactions, Tauzin said Enron was doing business with an entity whose only asset was shares of Enron that had come from the company.
"This clearly violated existing law and the most basic norms of corporate behavior," Tauzin said.
A lawyer for Enron was not immediately available for comment on Tauzin's remarks.
The partnerships were created and managed by Fastow, who pocketed at least $30 million from related dealings, according to the report by the Enron directors panel led by University of Texas Law School Dean William Powers.
Earlier, Tauzin said he wanted to ask former Enron president Jeffrey Skilling why his signature was absent from many of the deals with outside partnerships despite Enron's finance committee being told his approval was required.
"Of all the people who were supposed to sign the approval sheets, he's the only one who refused even though he voted to approve them at the board and the question is why not," Tauzin told reporters after giving a speech to a telecommunications industry conference.
Skilling is scheduled to appear before the House Energy and Commerce subcommittee on oversight and investigations. But unlike some other former Enron officials appearing Thursday, he will not invoke his right not to testify, Tauzin said. "We're told he's anxious to testify."
"I think he's going to take the Fifth," Tauzin said. "I think he's in deep trouble."
Tuesday, a witness said Enron gave millions in bonuses to top executives two days before filing for bankruptcy last year, then fired thousands of employees without the severance pay to which they were entitled, a tearful former company worker told Congress Tuesday.
"We have to wait in line behind the big banks in bankruptcy court. For employees, there won't be much, if anything, once it is all said and done," said Deborah Perrotta, a former senior administrative assistant at Enron.
That testimony, which made up just a small part of the Enron action on Capitol Hill Tuesday, drew special ire from lawmakers.
"The thought of employees sustaining huge losses while executives were able to sell stock for millions is infuriating," Sen. Joseph Lieberman said Tuesday in announcing plans to issue a subpoena to get information about bonuses paid to company executives in the run-up to its Dec. 2 bankruptcy.
All told, a dozen committees are investigating Enron, along with the Justice Department and Securities and Exchange Commission. The energy-trading company has deep political ties in Washington, and politicians in both parties have scrambled to distance themselves from Enron.
The Justice Department has rejected calls by some Democrats for a special prosecutor. And President Bush brushed off an appeal by a key senator to appoint a special prosecutor to lead the investigation. Mr. Bush says the Justice Department can handle the probe despite the president's own political ties to the company and the fact that the attorney general has already recused himself.
"This is a business problem that our Justice Department is going to investigate, and if there's wrongdoing we'll hold them accountable for mistreatment of employees and shareholders," President Bush said Tuesday.
Millions of investors lost money, and thousands of current and former Enron employees lost the great bulk of their retirement savings, when the company collapsed. An Enron-sponsored investigation released over the weekend blamed senior management for failing to provide proper supervision over a complex web of partnerships that helped the company hide debt and post unrealistic profit figures.
Lead Enron auditor David Duncan was fired in January, accused by his employer of organizing the destruction of Enron documents. Dunca has already invoked his fifth-amendment right not to testify before Congress.
At another hearing, the author of the withering Enron internal investigation described how the executives "enriched themselves ... by tens of millions of dollars" through questionable partnerships.
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