Democrats to introduce Enron-related bills

Leahy, left, and Lieberman both rejected calls for a special counsel to investigate Enron.

WASHINGTON (CNN) -- House Democrats Wednesday announced they will soon introduce several bills in response to the financial collapse of Enron, saying measures proposed by the president fall short.

"I'm glad President Bush unveiled his reform ideas last week," said Minority Leader Dick Gephardt, D-Missouri, "but we need to go further if we really want to clean up this system."

Gephardt said the Democrats' legislation will include: putting limits on the percentage of a 401(k) account that can be held in any one stock; tightening rules to prevent corporations from "hiding fiscal strengths and weaknesses"; strengthening oversight of the accounting industry; and compensating Enron employees who lost money in retirement accounts because they had invested in the company's stock, which tanked.

The Democrats' proposals came on the same day that Labor Secretary Elaine Chao told a House panel that more choice for workers -- not government restrictions on 401(k) accounts -- were key to protecting employees and their retirement plans.

VIDEO/AUDIO   •  Senate unit faults Enron board   •  Corporate corruption in America  MORE STORIES   •  3 Britons charged in Enron fraud   •  Bush pushes for tougher corporate rules   •  Playboy exposes Enron workers  EXTRA INFORMATION   •  Document: Powers report 9.5MB (PDF)   •  CNN/Money Special Report: Your 401(k)   •  Timeline: Shredding through history  RESOURCES   •  In-Depth: The end of Enron?   •  TIME.com: Inside the scandal

"We believe that one important way to reduce these risks is to give workers even more freedom, not less, more choice, not less," she told members of the House Education and Workforce Committee, one of three congressional panels to hold Enron-related hearings Wednesday.

"That is why the president's plan will give workers the right that the employees of Enron did not have," she said. "And that is the right to sell company stock, contributed by an employer to their 401(k), after a three-year period."

Enron, once listed as No. 7 on the Fortune 500, filed for bankruptcy in December amid allegations it engaged in questionable accounting practices, hid losses, lied about profits, and later destroyed financial documents as investigations multiplied.

At a hearing of the House Energy and Commerce Committee hearing, Rep. Billy Tauzin, R-Louisiana, cited "the high probability of security fraud in this case" and charged that "accounting principles were flaunted, ignored and circumvented right and left to the detriment of every investor and every employee of this company."

Earlier in the day, two Senate Democrats rejected a fellow Democrat's call for a special counsel to investigate the fall of the energy company, saying it would be premature.

Sen. Patrick Leahy, D-Vermont, chairman of the Senate Judiciary Committee, and Sen. Joseph Lieberman, D-Connecticut, chairman of the Senate Governmental Affairs Committee, expressed their faith in the Justice Department to handle its own criminal probe.

'Criminal conduct' potential

Lieberman said the threshold to appoint a special counsel is "substantial and credible evidence" that somebody at the highest level of government may have committed a crime.

"We're not at that point in any way," he told CNN. Both he and Leahy noted that Attorney General John Ashcroft has already recused himself from the Enron criminal investigation because he had received campaign contributions from the energy company while he served in the U.S. Senate.

On Monday, Sen. Ernest Hollings, D-South Carolina, called for a special counsel, citing contacts and links between Enron executives and the Bush administration. He said the Bush administration represented a "government of Enron," a charge rejected by the White House.

Leahy said the various congressional probes into Enron have not been hindered by the refusal of several top executives to testify.

"There's a real potential of criminal conduct here, there will certainly be grand juries looking at this," Leahy said, explaining why he believed the executives, including former Enron chairman Kenneth Lay, have refused to testify.

Lay, who bowed out of an appearance Monday, has been subpoenaed to appear before two congressional committees next week, but lawmakers expect he will invoke the Fifth Amendment and refuse to answer questions.