WASHINGTON – A Senate committee asked Enron Corp. on Wednesday to authorize release of its tax returns to give the public and Congress a "more informed understanding" of the bankrupt energy trader's financial dealings.
The Senate Finance Committee is in the beginning stages of a probe into Enron's possible use of tax shelters, its creation of more than 800 subsidiaries and the impact they may have had on the company's bottom line. The panel is also looking into Enron's pension programs, including its 401(k) plan and employer stock ownership plan.
In a letter to Enron Chief Financial Officer Jeffrey McMahon, Finance Committee Chairman Max Baucus, D-Mont., and the panel's senior Republican, Sen. Charles Grassley of Iowa, sought company authorization to make public Enron tax records since 1985 -- including those of its affiliated companies or partnerships.
Although the Finance Committee and the House Ways and Means Committee already have access to the tax records, their release to the public is limited due to privacy laws. This could restrict any hearings or public comments on the company's tax situation.
"It is critical that the public and the Congress have a more informed understanding of the activities and transactions related to Enron's tax returns and pension programs," the senators said in their letter.
Enron officials did not immediately return a telephone call seeking comment. The company and Arthur Andersen, the accounting firm that audited its books, are already involved in numerous congressional investigations stemming from Enron's rapid financial downfall last year.
The Finance Committee has not yet scheduled any hearings, but a spokesman said they could occur within a matter of weeks. Committee investigators are planning to meet this week with the Internal Revenue Service to begin the process of obtaining Enron tax records.
Citizens for Tax Justice, a liberal tax research organization, has estimated that Enron paid no corporate income taxes in four of the past five years. Enron paid $17 million in taxes in 1997 and got refunds totaling $381 million in all other years between 1996 to 2000, according to the group's analysis.