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Washington (September 24) -- House Energy and Commerce
Committee Chairman Billy Tauzin (R-LA) is expected to deliver the following
remarks today at an Oversight and Investigations Subcommittee hearing entitled,
"Capacity Swaps by Global Crossing and Qwest: Sham Transactions Designed to
Boost Revenues?"
Thank you Mr. Chairman, and let me also extend my warm appreciation, once
again, to Mr. Dingell and ranking member Deutsch for their cooperation and
assistance in this bipartisan Committee investigation.
When we set out to get to the
bottom of Enron’s financial collapse back in November last year, we said
we’d pursue the facts wherever they would lead us. And we did so with stubborn
determination, eventually showing the public how the deceptive and greedy
actions of a few executives can bring whole companies down, and bring financial
devastation to honest, hard-working employees and investors.
I’m sad to say this thread
of greed and deceit in the executive suite and boardroom seems to run through
other once-high-flying companies as well.
The hearing beginning this
morning will shine a light on the activities of two well-known telecom firms,
Global Crossing and Qwest. And I’m disappointed to say the evidence amassed by
the Committee raises once again some very troubling questions about the behavior
of certain individuals entrusted with making the right decisions for a company,
its employees, and its shareholders.
What we have before us today
are transactions involving the exchange of long-term leases – so-called swaps
of fiber-optic capacity – that appear to derive from quite the same deceptive
impulses that drove a handful of Enron executives to destroy that company.
Enron executives’
central deception was to engage in transactions designed to push debt off
Enron’s books to hide from Wall Street the company’s true financial position
– all in an effort to prop up its stock price.
Today, we’ll hear of
similar efforts to deceive Wall Street. In this case, we have evidence that
Global Crossing and Qwest executives pursued sham transactions to put revenue on
the books, to mislead investors, and to prevent further drops in their stock
prices.
We’ll also hear, a la
Enron, of employees trying to warn higher ups that certain deals were
inappropriate – only to see their warnings ignored.
The witnesses before us were
well aware of the transactions under scrutiny today. And I’m sure we’ll have
some dispute about what were legitimate business transactions, and what were
basically deceptive schemes, meant only to meet revenue targets.
Our duty, Mr. Chairman is to
pursue the facts and evidence. I believe it is essential for this Committee to
examine evidence of such deceptive behavior, which is so poisonous to the public
trust and the integrity of our financial markets. And I know, Mr.
Chairman, your dogged pursuit of accountability in these cases will help restore
such trust and integrity as we move forward.
Thank you and I yield back
the balance of my time.
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