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GAO-01-1020R 1 (2001-08-16)

handle is hein.gao/gaocrptamty0001 and id is 1 raw text is: SGAO Accountability * Integrity Reliability United States General Accounting Office Washington, DC 20548 August 16, 2001 The Honorable Joseph I. Lieberman Chairman Committee on Governmental Affairs United States Senate Subject: No Evidence That Communications Between the FERC Chairman and the Chairman of Enron Corporation Violated Criminal Statutes or Ethics Regulations Dear Mr. Chairman: This letter responds to your May 30, 2001, request that we review the communications between Curt H1bert, Jr., Chairman of the Federal Energy Regulatory Commission (FERC),' and Kenneth Lay, Chairman of Enron Corporation, who were the subjects of an article published in The New York Times on May 25, 2001. You were concerned that communications between the Chairman of FERC, an independent federal agency, and the Chairman of Enron, an entity regulated by that agency, may violate applicable federal criminal statutes or ethics regulations. We conducted our work in June 2001. We interviewed witnesses who have first-hand knowledge of the conversation referred to in the Times article--Mr. H1bert, his Chief of Staff, FERC's General Counsel, and Mr. Lay. In summary, based on our review of the information we gathered and consultation with our General Counsel, we found no evidence that either Mr. H~bert or Mr. Lay violated criminal statutes or ethics regulations. Communications Between Mr. Hebert and Mr. Lay Messrs. H~bert and Lay confirmed that they had a telephone conversation in February 2001, that Mr. H~bert asked Mr. Lay to endorse him continuing as FERC's Chairman,2 and that Mr. Lay asked Mr. H~bert about his views on what FERC's policy 'President George Bush named Mr. Hdbert as FERC Chairman on January 22, 2001. The President, with the advice and consent of the Senate, appoints all FERC commissioners to 5-year terms. The President designates one of the commissioners to serve as Chairman; the designated Chairman need not be approved by the Senate. Thus, Mr. Hdbert serves as Chairman at the President's sufferance and could be replaced, without Senate approval, if the President desired. On August 7, 2001, it was reported that Mr. Hdbert announced his resignation, to be effective at the end of August 2001. 2According to Mr. Lay, Enron had written to the White House supporting Mr. Hdbert when he was first appointed FERC Chairman. GAO-01-1020R Communications Between FERC and Enron

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