Feb 23, 2003
n/a
Skip these 63 Committee Hearings to read "The Enron Factor" below.

House Appropriations
MONDAY - 2/24/03
Subcommittee on Education
7:00 A.M., JHR 140

House Appropriations
MONDAY - 2/24/03
Subcommittee on Health and Human Services
7:30 A.M., E1.022

House Appropriations
MONDAY - 2/24/03
Subcommittee on General Government
8:00 A.M., E1.030

Senate Finance
MONDAY - 2/24/03
8:00 A.M., E1.036

Senate Finance ** POSTING CHANGE **
MONDAY - 2/24/03
8:00 A.M., E1.036

House Government Reform
MONDAY - 2/24/03
8:30 A.M., E1.026

House Appropriations
MONDAY - 2/24/03
Subcommittee on Regulatory
10:00 A.M., E1.018

House Insurance
MONDAY - 2/24/03
10:00 A.M., E2.026

House Land and Resource Management
MONDAY - 2/24/03
10:00 A.M., E2.012

Senate Infrastructure Development Security
MONDAY - 2/24/03
11:30 A.M., E1.028

House Appropriations
MONDAY - 2/24/03
Subcommittee on Criminal Justice
12:00 P.M., JHR 13

Senate State Affairs
MONDAY - 2/24/03
1:30 P.M. or Adj., Senate Chamber

House State Affairs
MONDAY - 2/24/03
2:30 P.M. or Adj., E2.010

House Higher Education
MONDAY - 2/24/03
2:30 P.M. or Adj., E2.036

House Human Services
MONDAY - 2/24/03
2:30 P.M. or Adj., E2.014

House Judicial Affairs
MONDAY - 2/24/03
2:30 P.M. or Adj., E2.028

House Law Enforcement
MONDAY - 2/24/03
2:30 P.M., E1.014

Senate Nominations
MONDAY - 2/24/03
3:00 P.M. or Adj., E1.016

House Appropriations
TUESDAY - 2/25/03
8:00 A.M., E1.030

House Corrections
TUESDAY - 2/25/03
8:00 a.m., e2.026

Senate Finance
TUESDAY - 2/25/03
8:00 A.M., E1.036

House Transportation
TUESDAY - 2/25/03
8:00 A.M., E2.012

Senate Education
TUESDAY - 2/25/03
8:30 A.M., E1.028

House Government Reform
TUESDAY - 2/25/03
8:30 A.M., E1.026

Senate Business and Commerce
TUESDAY - 2/25/03
9:00 A.M., Betty King Committee Room

Senate Health and Human Services
TUESDAY - 2/25/03
11:00 A.M., Senate Chamber

Licensing and Administrative Procedures
TUESDAY - 2/25/03
Subcommittee on Occupational and Professional Licensing
1:00 P.M. or Adj., Room 140, Reagan

Senate Natural Resources
TUESDAY - 2/25/03
1:00 P.M., E1.012

House Insurance
TUESDAY - 2/25/03
1:30 P.M. or Adj., Room 120, Reagan Bldg.

House Business and Industry
TUESDAY - 2/25/03
2:00 P.M., E2.028

House Criminal Jurisprudence
TUESDAY - 2/25/03
2:00 P.M. or Adj., E2.016

House Environmental Regulation
TUESDAY - 2/25/03 ** REVISIONS **
2:00 P.M. or Adj., E1.014

House Public Education
TUESDAY - 2/25/03
2:00 P.M., E2.036

House State Cultural Recreational Resources
TUESDAY - 2/25/03
2:00 P.M., E2.014

House Regulated Industries
TUESDAY - 2/25/03
2:00 P.M., E2.010

House State Health Care Expenses
TUESDAY - 2/25/03
4:00 P.M. or Adj., E1.010

House Appropriations
WEDNESDAY - 2/26/03
8:00 A.M., E1.030

House Border and International Affairs
WEDNESDAY - 2/26/03
8:00 A.M., E1.014

House County Affairs
WEDNESDAY - 2/26/03
8:00 A.M., E2.016

Senate Finance
WEDNESDAY - 2/26/03
8:00 A.M., E1.036

House Economic Development
WEDNESDAY - 2/26/03
8:00 A.m., E2.028

House Public Health
WEDNESDAY - 2/26/03
8:00 A.M., E2.036

House Government Reform
WEDNESDAY - 2/26/03
8:30 A.M., E1.026

House Urban Affairs
WEDNESDAY - 2/26/03
10:30 A.M. or Adj., E1.010

Senate Intergovernmental Relations
WEDNESDAY - 2/26/03
11:30 A.M. or Adj., Madla's Desk

House Administration
WEDNESDAY - 2/26/03
On Adj., JHR 110

Senate Government Organization
WEDNESDAY - 2/26/03
1:00 P.M., Betty King Committee Room

Senate Veteran Affairs/Military Installations
WEDNESDAY - 2/26/03
1:30 P.M., Betty King Committee Room

House Civil Practices
WEDNESDAY - 2/26/03
2:00 P.M. or Adj., E2.026

House Elections
WEDNESDAY - 2/26/03
2:00 P.M., E2.012

House Natural Resources
WEDNESDAY - 2/26/03
3:00 P.M. or Adj., E2.014

House Agriculture and Livestock
THURSDAY - 2/27/03
8:00 A.M., E2.016

Senate Finance
THURSDAY - 2/27/03
8:00 A.M., E1.036

Licensing and Administrative Procedures
THURSDAY - 2/27/03
8:00 A.M., E2.012

House Local Government Ways and Means
THURSDAY - 2/27/03
8:00 A.M., E2.026

Defense Affairs and State-Federal Relations
THURSDAY - 2/27/03
8:00 A.M., E2.010

House Juvenile Justice and Family Issues
THURSDAY - 2/27/03
10:30 A.M. or Adj., E2.028

House Transportation
THURSDAY - 2/27/03
Subcommittee on Best Practices
1:00 P.M., JHR 120

House Appropriations
FRIDAY - 2/28/03
Subcoommittee on Health and Human Services
7:30 A.M., JHR 120

House Appropriations
FRIDAY - 2/28/03
Subcommittee on Education
8:00 A.M., E1.030

Senate Finance
FRIDAY - 2/28/03
The Enron Factor

Buried by an avalanche of bad news˜terrorism and the specter of war, the continuing economic malaise, and skyrocketing budget deficits both in Washington and in the states˜the Enron disaster and subsequent corporate scandals have faded somewhat from public consciousness in the past year. However, Enron still casts a long shadow over policymaking and the rhetoric of policymaking at the national and state levels. This is certainly true in Texas, and it is likely that before the Legislature goes home on June 2, the name of Enron will have been used and abused in a number of policy contexts.

First and most obviously, the Enron scandal has provoked the filing of at least two potentially important pieces of legislation to the Texas corporate community. One of those bills, S.B. 145 by Senator Rodney Ellis (D-Houston), proposes to create a corporate integrity unit within the Attorney General‚s Office. This unit would be charged with investigating and prosecuting corporate fraud and other illegal activities in concert with local district and county attorneys. One can imagine the uses to which such a unit might be put, especially in the hands of an aggressive and politically ambitious attorney general.

The second proposal, S.B. 605 by Senator Eliot Shapleigh (D-El Paso), would require certain domestic and foreign corporations to file an annual report with the State Securities Board certifying that the corporate officers have reviewed each financial report and that the report does not contain an untrue statement of material fact or an omission of material fact. The corporate officers are further charged with instituting internal controls to ensure that material information relating to the condition of the corporation is discovered and disclosed to the corporate leadership. S.B. 605 makes it a criminal offense for a corporate director or officer, or a person representing either of them, to fraudulently influence, coerce, manipulate, or mislead an independent accountant in the conduct of a financial audit. It also subjects the corporation to criminal liability for retaliation against a corporate employee who reports unlawful activity. The Attorney General is empowered to investigate any potential violation of the law and may assist local law enforcement in prosecuting violations.

In addition to motivating legislation directly responsive to allegations of corporate misconduct, the Enron factor is influencing the Legislature in more subtle but no less important ways. For example, in last Wednesday‚s hearing of the House Civil Practices Committee, which heard testimony regarding H.B. 3 (medical liability reform legislation) and H.J.R. 3 (the constitutional amendment authorizing the Legislature to cap damage awards), a witness representing the Texas Trial Lawyers Association invoked Enron, WorldCom, and other corporate scandals in arguing against any further liability reform. When the same committee hears H.B. 4 (the general tort reform act) this week, you can expect to hear more broadsides against corporate fraud and irresponsibility. Before the plaintiff‚s trial bar and its advocates on the House floor are finished, H.B. 3 and H.B. 4 will have become referenda on corporate evil and greed. A vote for those bills will be a vote against Texas workers, consumers, retirees, and shareholders. A vote against those bills will be a blow for true reform of corporate misconduct. It will be a bloody fight.

A related issue is insurance reform, which began as a mold crisis and has metamorphosed into a full blown inquisition into insurance rating and underwriting practices in virtually all lines of business. S.B. 310, which has already passed the Legislature and is set to go into immediate effect, requires insurers to disgorge virtually every scrap of information they possess, whether proprietary or not. The broad reach of this bill, and the potential for mischief it creates, almost certainly will redound to the disadvantage of an industry already on its heels. The perception of legislators that insurers are unwilling to come clean with their financial data, their true profits, and their credit scoring models, to name a few, is fueling the fire. While not directly attributable to the Enron factor, the insurance inquisition is an iteration of it, an exploration into the mystery of corporate business and the ways corporations account for the money they collect from the public.

While tort and insurance reform are the first big business issues out of the chute this session, tax reform will ultimately become a much bigger issue as the budget crisis deepens. And again, Enron is playing a role. When Governor Perry asserted in his State of the State address that some corporate businesses are avoiding their fair share of the tax burden, he was undoubtedly thinking not only of large Texas companies that have recently reorganized to reduce their Texas franchise tax liability, but of Enron, the symbolic corporate „shirker.‰ What the Governor and others who advocate closing the „Delaware sub loophole‰ are not considering is the adverse economic impact such a change will have on capital intensive Texas corporations that have been competing with partnerships for decades on a tilted playing field. Once again, Enron and related scandals have tainted the corporate community as a whole, making it that much more difficult for the Texas business community to make their case on the Delaware sub and other tax issues.

There are bound to be numerous other instances in which the Enron factor will surface. For example, legislation affecting business structures, such as H.B. 1156, an immense Business Organizations Code recodification bill, will likely get much closer scrutiny in this Legislature than they might otherwise have received. The new Republican majority, seeking to consolidate its hold on legislative power, will likely be a little nervous about any legislation that appears to favor corporate business in any „special interest‰ sense. While recodification bills like H.B. 1156, or technical bills like H.B. 1165, which makes a number of changes to the Texas Business Corporations Act, are necessary to bring Texas business law into the national mainstream, they may also become targets for Enron-baiting, especially if there is anything in any of those bills that the trial lawyers don‚t like. It is certainly something that advocates for those bills need to watch out for.

The Enron factor is clearly out there and shows no signs of dying away. Look for those opposing liability reform and other pro-business legislation to make hay while the sun shines.