The Swamp Fox on Enron's Tail

Is Billy Tauzin--a longtime accounting-industry pal--the right man to lead the Hill's charge?

Representative W.J. "Billy" Tauzin, the affable Republican chairman of the House Energy & Commerce Committee, once observed of his home state of Louisiana that "half of it is underwater. And the other half is under indictment." That pretty much sums up Tauzin: wickedly funny, disarmingly candid, and--given some of the politicians Louisiana has produced--painfully on the mark.

Sometimes called the Cagey Cajun or the Swamp Fox for his droll humor and deft politics, Tauzin is a master at using his committee to full effect. While he's leading just one of 10 groups looking into the Enron Corp. (ENE ) mess, count on him to be at the center of the action as the investigations heat up. Thanks to his early acquisition of documents and digging, much of what has come to light in recent weeks--including the letter that Enron executive Sherron S. Watkins wrote last August to CEO Kenneth L. Lay warning of the company's impending collapse--has come from his team of 15 investigators.

The Enron probe won't be the first controversy to put Tauzin in the spotlight. Many of the highest profile congressional hearings of the past 18 months have been his doing. Remember the Ford-Firestone probe? That was his. The hearings into the election-night network-TV projections in Florida? Tauzin again. The California energy crisis? He was in the middle of that investigation, too. The explanation for his frequent forays? It's partly due to his committee's jurisdiction--and partly his own desire to be the showman.

But Enron clearly puts Tauzin in an uncomfortable position. As he doggedly pursues the hottest story in business, the southern Louisiana lawyer has had to do a little backtracking of his own. Until now, he has been one of the most unabashed defenders of the accounting industry in Congress. He took $57,000 in campaign contributions from accounting firm Arthur Andersen over the past 12 years, more than any other House member. What's more, he was instrumental in defeating former Securities & Exchange Commission Chairman Arthur Levitt Jr.'s efforts to clamp down on accounting industry conflicts of interest in late 2000. "Today," he says rather sheepishly, "it's kind of hard to say there isn't evidence of a problem.Arthur Levitt was right."

It isn't the first time that Tauzin has dramatically reversed his position. Colleagues--some admiringly, some not--call him Congress' "ultimate political chameleon." Indeed, the Cagey Cajun has changed his political stripes before, with no ill consequences. After the GOP took control of the House in 1995, he not only switched parties but also negotiated his way into a powerful subcommittee chairmanship. In one quick move, he managed to stay in the majority and cut in front of several lifelong Republicans to head the panel that oversees telecommunications.

Tauzin's change of tune in the current controversy could have profound policy consequences. Once a staunch deregulator, he now vows a thorough look at how Big Business conducts itself. "We're finding out that there are real problems endemic in the structure of Corporate America that we need to deal with," he told BusinessWeek. "Enron is just the worst example."

But can someone who has reversed positions and been closely tied to the accounting business convince the public that he is earnest in his efforts to police it? Many believe that while Tauzin is brilliant at political theater, he's unlikely to go to the mat for tough new accounting rules. "Things like this make good television," says Bill Allison, managing editor of publications for the consumer watchdog group Center for Public Integrity. "But I don't know that they're going to make good law." Furthermore, some critics observe that while Tauzin's talk is now tougher, he has no intention of giving back any of the industry donations he has received.

Even so, voters back home give the congressman a lot of maneuvering room. He's adored in his district along the Mississippi Delta for his panache and his help for local business. As a result, he has run unopposed in most of his recent reelection races, as a Democrat or a Republican. Besides, as former Senator J. Bennett Johnston (D-La.) says: "Consistency is the hobgoblin of small minds. And Tauzin does not have a small mind."

Indeed, he's hoping to use those smarts to prove doubters wrong. Already, committee staffers have interviewed former Enron CEO Jeffrey K. Skilling; David B. Duncan, the recently-fired Andersen partner who handled the Enron account; as well as that firm's risk-management chief, Michael C. Odom. Tauzin is also negotiating to meet with former Enron Chief Financial Officer Andrew S. Fastow, who managed and had stakes in some of the risky partnerships that caused the company to crater.

But there is the potential for disappointment, too. He has set the stage for his own high-profile hearings by selectively releasing some of the tens of thousands of pages of Enron and Andersen documents his staffers have culled through, and his new challenge will be to deliver something more than headlines. Moreover, Tauzin must also take care not to do anything that would undercut the criminal probes undertaken by the Justice Dept.

For now, though, Tauzin is playing it cool. While his staff was hunting through records over the Martin Luther King Jr. holiday weekend, he was chasing deer in Alabama and keeping in touch with his crew via BlackBerry. "He may be hunting deer," one staffer laughed, "but he's got his dogs hunting Enron." After the upcoming hearings, Tauzin may have some more headlines for his scrapbook.

By Dan Carney and Laura Cohn in Washington, D.C.

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