WASHINGTON, Jan. 24 (UPI) -- A congressional panel Thursday said it will try to determine whether federal agencies did everything possible to protect Enron Corp. investors and employees in the years leading up to the company's collapse.
"We must also ask if the regulatory agencies need additional powers to prevent this kind of massive investor rip-off from occurring again," said Sen. Joseph Lieberman, D-Conn., head of the Senate Governmental Affairs Committee.
"This is not just a tempest in a teapot," Lieberman said. "It is an unprecedented corporate storm that has already hurt thousands of people and now leaves a dark cloud over America's economy and Americans' confidence in their future personal economic security."
The Houston-based energy giant filed for bankruptcy protection Dec. 2, collapsing amid charges of improper accounting techniques. Before its sudden demise, Enron was the world's largest energy trading firm.
Lieberman said the Senate panel's investigation will resolve whether the Securities and Exchange Commission, the Labor Department, the Commodity Futures Trading Commission and Federal Energy Regulatory Commission took all necessary measures to protect investors.
He insisted the panel will discover any regulatory voids that "allowed Enron to take liberties" the company should not have been permitted.
"Is the system so rife with conflicts of interest that the average American, trusting his or her future to the stock market, is inadequately informed, poorly protected, and therefore enormously endangered?" he asked.
Former SEC Chairman Arthur Levitt urged auditing firms and Wall Street analysts to disclose how their compensation was affected by their firm's investment banking relationships.
"Enron's collapse did not occur in a vacuum. Its backdrop is an obsessive zeal by too many American companies to project greater earnings from year to year," Levitt testified.
"When I was at the SEC, I referred to this as a 'culture of gamemanship' -- a gamemanship that says it is OK to bend the rules, tweak the numbers and let obvious and important discrepancies slide."
Lieberman said that about 60 percent of U.S. citizens own stocks in corporations as part of their retirement plans, and that his panel will do everything to "better protect the 401(k)s and pension funds that are now at the heart of the retirement security."
As part of those efforts, Sen. Jean Carnahan, D-Mo., introduced legislation Thursday that would require information about sales of company stock by executives of publicly traded corporations. The data would be filed electronically and made available instantly to the public via the Internet.
"This single reform could dramatically level the playing field between insiders and ordinary investors," Carnahan said in a statement. "Never again would company executives be able to dump large amounts of company stock without facing immediate scrutiny of the financial health of the company."
Lawmakers are looking into why Enron failed to report hundreds of millions of dollars in losses to stockholders and employees. As a result of the company's bankruptcy, thousands of Enron employees and investors lost virtually all of their stock portfolios, pensions and retirement funds.
