Statement of Rep. John Boehner  

     Chairman, Committee on Education and the Workforce  

                           Hearing on:  

ìThe Enron Collapse:  Impact on Investors and Financial Marketsî  

                            before the  

  Subcommittee on Capital Markets, Insurance and Government  

 Sponsored Enterprises, and the Subcommittee on Oversight and  

         Investigations, Committee on Financial Services,  

                  U.S. House of Representatives  

                       December 12, 2001  



I want to thank the Committee on Financial Services for inviting me to make a statement today 
on this very important issue of the Enron bankruptcy.  I would also like to acknowledge the very 
important contribution to this effort of Mr. Baker, Ms. Kelly, Mr. Gutierrez, Mr. Kanjorski, and 
the full committee chairman, Mr. Oxley and ranking member, Mr. LaFalce. 


Let me congratulate the committee on your quick action and hard work on behalf of Americaís 
investors, who now include more than half of all American families.  I submit this statement to 
raise concerns as they relate to another segment of investors ñ Enron employees and retirees who 
have invested a substantial portion of their retirement assets in Enron stock.  Employer-
sponsored pension plans are regulated by the Employee Retirement Income Security Act, more 
commonly known as ìERISA,î which is within the jurisdiction of the Committee on Education 
and the Workforce.  Many of the issues raised by the Enron bankruptcy involve not only the 
participants in the Enron pension plan but also potentially the millions of Americans who 
participate in their employersí pension plans and depend upon these plans to provide them with 
financial security in their retirement.  ERISAís cornerstone is a series of strict fiduciary 
standards of conduct imposed on individuals or entities that manage employeesí assets in 
company pension plans. 


ERISA allows employees to invest in equities offered by their pension plan. Investing in equities 
offers opportunities for rewards in growth, but it also offers risks.  This is certainly true of 
company stock.  Enronís employees who held Enron stock in their 401(k) accounts appear to 
have lost substantial amounts of money. On the other hand, employees at many other companies 
have made substantial amounts and therefore have significantly enhanced their retirement 
security.  Furthermore, on a bipartisan basis over the last 20 years, Congress has encouraged the 
sale of employer stock to employees both individually and in their pension plans as a means to 
provide an extra incentive for enhanced job performance and direct participation of an employee 
in the future of their company.  We should continue to protect these gains and not adversely 
affect the holdings of employees by unduly restricting this opportunity. 



At the present time there are a number of formal investigations and inquires taking place as a 
result of the Enron bankruptcy. Todayís hearing, the action of the Securities and Exchange 
Commission, and the investigation of the Department of Laborís Pension and Welfare Benefit 
Administration will bring the relevant facts to light. Once the facts are known, careful 
consideration should be given as to whether Congress should amend the law regarding company 
stock ownership in pension plans. If the facts demonstrate that the conduct in the Enron case was 
in violation of existing law then the appropriate parties will be held accountable.  It may also be 
the case that the Enron matter demonstrates that Congress needs to make legislative changes to 
protect employees. If that is the case, we should move quickly and thoughtfully to make those 
changes. 


As the chairman of the Committee with jurisdiction over ERISA, I assure you that in the next 
session the Committee will be carefully considering the Enron situation and its implications. 
The Committee will be examining the issues surrounding the Enron benefits plan and its 
compliance with ERISA. Specifically, the Committee will seek to understand the facts and 
circumstances surrounding the problems with Enron and will use this information to assess how 
well ERISA protects plan participants. 


Our consideration of these issues will be thorough, fair and deliberate. I intend to work with the 
Committeeís ranking member Mr. Miller, Employer Employee Relations Subcommittee 
Chairman Mr. Sam Johnson and ranking member Mr. Andrews to achieve this goal.