Thank you, Mr. Chairman. We had hoped that today – for the first time in this long Enron investigation – we would hear directly from the people who created the partnerships that brought Enron crashing down while making millions for themselves. We had hoped to hear why this all happened. We had hoped to hear what these people thought about the loss of the jobs of thousands of employees and the savings of even more employees, shareholders, pension funds, and other investors. But most of the key players are staying silent – for what appears to be good reason.

We know from the Powers Report that key executives misbehaved, and that others were, at best, clueless. For years they and Enron played fast and loose with their numbers, their ethics, and their public representations. As long as the earnings and the stock went up, everyone was happy, and no one needed to know exactly how these numbers were created. Enron’s culture, moreover, discouraged anyone from raising objections. For employees, bonuses and their very jobs depended on being "team players." The infamous "rank and yank" system that got rid of the bottom ten percent of all employees every year could be – and was – manipulated to get rid of anyone who caused trouble.

Enron’s executive suites seemed to be the personal sandbox of the golden boys who had been clever enough to structure financial vehicles that would take debt and losing assets off the books and turn them miraculously into income. Mr. Fastow, who almost got "yanked" because of his inability to achieve real earnings in one of Enron’s energy divisions, became a star by creating false earnings. Favoritism and chaos reigned in his Global Finance division where people with inside information and paychecks from Enron – but their bonuses from LJM2 – were negotiating contracts for Mr. Fastow’s and Mr. Kopper’s partnerships with other Enron employees. If the Enron negotiators were too tough, they sometimes got personal calls from Mr. Fastow. Two people who were engaged to be married were negotiating against each other. One of them actually got a $60,000 payment from one of Mr. Kopper’s partnerships for structuring a deal. Mr. Skilling, the company’s president and chief executive officer, was warned about the problems these partnerships were causing in the office. He did nothing except to find another job for the complainant.

Nor did others in positions of authority distinguish themselves. There are very few innocent parties in the board rooms and executive suites at Enron. The Board of Directors approved these related party transactions because they were "fast and cheap." In other words, debt and assets could be moved around quickly, and Enron wouldn’t have to pay investment bank fees. Then senior management and the Board gave the transactions to the company’s chief financial officer because he would know where to find investors. But as a former Securities and Exchange Commissioner said recently, "A CFO, of all people, has to have an undivided loyalty to the company." Such a structure is a recipe for disaster.

And a disaster is what followed. Enron, the seventh largest company in the nation, a darling of Wall Street and a publicly held company, failed – taking with it the incomes, savings, and dreams of its employees. This Committee, and the Congress, has a duty to find out what happened. We may find that the scandal isn’t just what was illegal. An even bigger scandal may have been what was legal.