SEC Seeks More Enron Documents

WASHINGTON —  The Securities and Exchange Commission asked a federal judge Monday to force former Enron Corp. Chairman Kenneth L. Lay to turn over documents sought for an SEC investigation of the Houston energy company.

The SEC said Lay was wrong to contend that surrendering the documents would violate his constitutional right against self-incrimination.

The agency asked U.S. District Judge Royce Lamberth in Washington to order Lay to produce the documents so that the judge could determine whether they were, as the SEC contended, corporate documents and not personal papers.

In its court filing, the SEC said Lay had told the agency the documents in dispute included copies of Enron memoranda and other documents that included Lay’s handwriting as well as copies of letters, position papers and drafts of speeches.

Through his attorneys, Lay had refused to produce the documents on the self-incrimination claim.

“The documents withheld by Lay, generated during his tenure at Enron, are corporate records,” the SEC said in Monday’s court filing.

The agency said there was no 5th Amendment protection for the corporate records, and that they must be turned over “even when the records might tend to incriminate the individual personally.”

Lay’s attorneys and his spokeswoman Kelly Kimberly did not return phone calls seeking comment.

Enron spiraled into bankruptcy protection in late 2001, the first of a wave of corporate accounting scandals that engulfed not only Enron but such big corporate names as WorldCom Inc., Global Crossing Ltd. and Adelphia Communications Corp.

The fallout from those reverberated from Wall Street to Congress, which responded to the public outcry last year by passing a far-reaching corporate responsibility law, the Sarbanes-Oxley Act.

Legal analysts said fallout from those cases was continuing with the government pursuing a tougher line in trying to build civil and criminal cases.

“Enron was the first of an enormous wave of corporate accounting scandals, and that wave has prompted the government to push for more criminal prosecutions,” said Dan Small, a former federal prosecutor now with law firm Broad & Cassel.

Robert Mintz, another former federal prosecutor, said the SEC was trying to build a civil case against Lay to make sure it had a fallback position if Justice Department prosecutors should fail in efforts to develop a criminal case.

“At this point it is an open question whether criminal charges will ever come together for the government against Ken Lay, so the SEC is lining up a civil case as a backup,” Mintz said.

The highest-ranking Enron executive charged to date is former Chief Financial Officer Andrew S. Fastow, who faces close to 100 criminal charges including fraud, money laundering, conspiracy and obstruction of justice. Fastow has pleaded not guilty and is free on a $5-million bond as he awaits trial in April.

In August, Michael Kopper, managing director under Fastow of Enron Global Finance, pleaded guilty to money laundering and conspiracy and agreed to cooperate with federal prosecutors in what one called a substantial breakthrough in the investigation.

Fastow has been accused of masterminding the schemes that led Enron into bankruptcy protection in 2001 amid devastating disclosures of inflated profit, hidden debt and questionable accounting.

Although the government has not filed criminal charges against Lay, the former chairman, or Jeffrey K. Skilling, the company’s former chief executive, the two were named in a civil lawsuit filed in June against Enron and several former executives and directors.

The civil suit filed by the Labor Department seeks to recover hundreds of millions of dollars in retirement money that Enron employees lost when the company went into bankruptcy protection.