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Lay hearing canceled
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February 13, 2002: 5:41 p.m. ET
Whistleblower Sherron Watkins to testify at House hearing Thursday.
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NEW YORK (CNN/Money) - Congressional investigators canceled a planned Thursday hearing in which former Enron Chairman and CEO Kenneth Lay had been expected to appear.
Lay had indicated earlier this week that he would not answer questions at the hearing Thursday. Earlier this week, the former executive had invoked his Fifth Amendment right against self-incrimination and remained silent at a Senate panel.
Lay said Tuesday he would not answer questions from any congressional committees, which would include Thursday's hearing before the House Financial Services Committee.
"When our Committee compelled Mr. Lay's appearance, it was with the hope that we would gain testimony on the Enron collapse that would assist us with our review of the many financial and accounting issues it has raised," Rep. Michael G. Oxley (R-OH), chairman of the committee said. "It is now clear, according to communications from his attorney, that Mr. Lay intends to invoke his rights under the Fifth Amendment, therefore, we see no benefit in convening tomorrow's subcommittee session."
However, whistleblower Sherron Watkins will appear and testify Thursday before another panel, the House Energy and Commerce Subcommittee on Oversight and Investigations. Watkins is the Enron employee who warned Lay of the company's serious financial problems in August 2001.
Meanwhile, Enron CEO Kenneth Lay may have deliberately misled the public at two separate times to keep the company's problems under wraps, according to Lay's comments to an internal investigative committee in January which were reported in a newspaper Wednesday.
While Lay told the Enron panel Jan. 16 that he committed no wrongdoing, his remarks suggest he was not upfront about the reasons for the resignation of then-CEO Jeffrey Skilling in August and his lack of confidence in Chief Financial Officer Andrew Fastow in an October conference call to analysts and reporters, according to the Wall Street Journal.
Enron filed for bankruptcy protection on Dec. 2, the largest such filing in U.S. history.
A memo from the law firm of Wilmer, Cutler & Pickering surfaced Tuesday, but the notes from the investigation were destroyed, said William Powers Jr., dean of University of Texas Law School and the man who led the internal committee, according to the report.
While the 17-page memo indicates no knowledge of certain financial dealings, it claims that Lay and other executives hid the fact that Skilling's main reason for leaving Enron may have been concerns over the stock price, the Journal said.
Separately, minutes from an Enron board meeting on June 28, 1999, indicate Lay, Skilling and Fastow discussed a partnership Fastow was proposing and that Skilling "noted that due to changes in the accounting treatment of off-balance sheet transactions the company had been analyzing new types of financing vehicles," a congressional source told CNN.
Lay has denied knowledge of the off-balance sheet partnerships.
The minutes said Fastow noted that PricewaterhouseCoopers would be rendering a fairness opinion that the value Enron was receiving in the transaction was in excess of the value of the forward contract that Enron was giving up, the source said. 
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