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WASHINGTON, Dec 18 - Seeking to protect other U.S. workers from the retirement savings meltdown suffered by Enron Corp. employees, two senators proposed legislation on Tuesday requiring more diversification in pension plans.

Senators Barbara Boxer and Jon Corzine also called for a thorough investigation of events leading to Enron's collapse, with Boxer declaring she thought someone should ``go to jail'' for the way Enron employees had been left in the lurch.

Thousands of Enron workers lost their jobs and much of their retirement savings when their retirement plans collapsed along with the former energy giant's stock price.

Boxer and Corzine said 67 percent of the assets in Enron 401(k) retirement plans were invested in Enron stock. They proposed limiting to 20 percent the investment an employee can have in any one stock in their individual 401(k) accounts.

``No one who gives investment advice would ever recommend someone being invested at 67 percent,'' Corzine, a New Jersey Democrat, told a news conference together with Boxer, a California Democrat. ``Frankly we have been generous with our bill putting down a 20 percent cap,'' Corzine said.

The proposal also calls for limiting to 90 days the time an employer can force an employee to hold a matching employer stock contribution in the employee's individual account plan.

It urges a reduction to 50 percent from 100 percent the tax deduction an employer can take on a matching contribution to an individual if that contribution is made in company stock.

With Congress soon to recess for the year, Boxer and Corzine's bill will likely have to wait until next year to progress. They also acknowledged they have yet to round up Republican support.

TEARFUL WORKERS

Boxer and Corzine spoke after tearful Enron workers told the Senate Commerce Committee how they had been left with nothing after the collapse of the company, which made the largest bankruptcy court filing in U.S. history on Dec. 2.

``When you look at the faces of these hardworking, loyal company employees who have nothing -- they are physically sick over what happened -- you would say the Justice Department should go after these (Enron) people and they should be penalized,'' Boxer said.

Boxer charged earlier this month that the one-time energy giant Enron had broken existing pension law, a law she authored four years ago, when it prohibited employees from divesting company shares from their retirement plans.

She said she would continue urging the government to enforce that four-year-old law, and planned to write to the Justice Department about it, but added that law was no long(er) enough.

``We're going to see if Enron broke the law. I personally think they broke many laws. I hope some of these people wind up in jail ...And that extends to people who audited the books here,'' she said.

``But unfortunately that law was watered down ...I want to do more,'' she said.

To the surprise of shareholder advocates, the Securities and Exchange Commission voted unanimously yesterday for far greater disclosure of corporate stock option plans.

Advocates of better corporate governance have long complained that the true impact of options on profitability and shareholder value has been obscured in financial reports. Many big companies have opposed additional disclosure but may have softened recently out of fear they might be forced to take harsher steps, like accounting for options as an expense.

Under the new rule, companies will have to disclose stock option plans that have not been approved by shareholders and, in many cases, are not accounted for on corporate proxy statements. They are already supposed to disclose approved plans.

"The change is a good one for investors and will hopefully shed some sunlight on company activities regarding nonapproved plans," said Ann Yerger, director of the Council of Institutional Investors.

The move may also signal a charm offensive by Harvey L. Pitt, the new S.E.C. chairman. Many shareholders and their representatives have been wary of Mr. Pitt, a lawyer who once represented many of the companies he is now charged with policing.

Increasing disclosure on options was one goal of the former S.E.C. chairman, Arthur Levitt, but many shareholder advocates had all but given up hope that his successor would push the cause.

A longtime shareholder advocate called in recently for a tête-à-tête with Mr. Pitt said it was the first time an S.E.C. chairman had sought such a meeting in 15 years. "I was given a very reassuring impression from that meeting," the advocate said, "that he was committed to looking at the range of issues shareholders care about."

Few people outside the world of compensation consultants, regulatory officials and corporate governance experts are aware of nondisclosed option plans. But according to a survey of 160 companies by iQuantic Inc., a research firm, 30 percent had nonshareholder-approved plans, up from 5 percent five years ago. Stock-based compensation plans that nominally apply to a broad range of employees do not require shareholder approval.

"The theory is that shareholder approval should enter into the equation only when a potential conflict is involved, as in when managers are paying themselves," said Nell Minow, editor of the Corporate Library, a research firm in Washington. "But my understanding is that some plans are potentially broad based but in application are far more narrowly focused."

In other words, companies may find ways to call a plan broad based even if it applies to relatively few people.

Because broad-based plans do not have to be disclosed, no one is sure how many companies have them, although it is possible to painstakingly parse some information from regulatory filings.

"It may not be as eye-popping as expected because the potential dilution from these shares should have already been disclosed in the 10-K footnotes," said Claude E. Johnston, a managing director at Pearl Meyer & Partners, an executive pay consulting firm.

The S.E.C. ruling will require companies to disclose the number and weighted average exercise price of all outstanding options, warrants and rights, as well as the number of shares held in reserve to be used for stock-based compensation program.

The rule takes effect after March 15, according to an S.E.C. spokesman, and will not affect the majority of companies now putting together year-end regulatory filings and proxy statements.

The enhanced disclosures will appear in 10-K filings as well as in proxy statements in years in which companies are submitting compensation plans for shareholder approval.

As recently as a few weeks ago, S.E.C. staff members had told shareholder advocates that the movement for greater disclosure of options was "dead in the water," one shareholder advocate said.

Mr. Levitt had tried to encourage the New York Stock Exchange and the Nasdaq stock market to adopt listing requirements that would force companies to obtain shareholder approval for some types of stock- option plans.

The exchanges have not acted yet, although the New York exchange has said that it will go along with the Levitt proposals if Nasdaq will, and some suggested that the ruling was a means of pushing the exchanges forward.

Patrick S. McGurn, vice president at Institutional Shareholder Services, which advises big investors, suggested that there also might be an element of corporate strategy embedded in the passage of the rule. Mr. McGurn noted that the International Accounting Standards Board was considering a rule that would require companies to charge options to the bottom line at the time they are issued, incurring a significant hit to earnings.

Many companies vigorously oppose that proposal, and last week they sent a sharply worded letter to the international board's chairman, Sir David Tweedie. "We are deeply concerned, however, that by electing to take up stock-option accounting as one of its first major issues, the I.A.S.B. raises troubling questions about its future," wrote the International Employees Stock Option Coalition.

The coalition represents trade associations and companies ranging from the United States Chamber of Commerce and the Business Roundtable to Sun Microsystems, Oracle and Cisco Systems, three of the biggest granters of options for executive compensation.

The letter takes on a slightly ominous tone, saying, "If the I.A.S.B. continues on this controversial track, the debate on this one issue could endanger the current consensus supporting the I.A.S.B."

"You have to read this action today in connection with that letter," Mr. McGurn said. "The corporate community is now cheering on the S.E.C. in hopes that the sunshine of disclosure alone will be enough to satisfy investor and thus head off the I.A.S.B. from going forward and requiring expensing of equity-based compensation."

WASHINGTON - As the stock price plummeted, current and retired employees of failed Enron Corp. helplessly watched their life savings dissolve because the company barred them from selling Enron shares from retirement accounts.

Their anger and sense of betrayal after years of loyal service to the energy-trading giant were displayed at a Senate hearing Tuesday at which several Enron employees testified.

``We have been lied to and we have been cheated,'' retiree Janice Farmer declared at the hearing by the Senate Commerce subcommittee on consumer affairs, held to examine one of the biggest corporate failures ever.

Farmer had nearly $700,000 in Enron stock and now faces living on a $63 monthly pension check. Charles Prestwood, who retired after 33 1/2 years in the natural gas business, mostly with Enron, lost nearly all his $1.3 million in savings.

The employees disputed Enron officials' assertion that they were locked out of their accounts for 10 business days this fall, saying it was much longer - increasing their losses.

``This is a tragedy for many, including the workers and investors who ... have been cheated out of billions of dollars,'' said Sen. Byron Dorgan, D-N.D., the subcommittee's chairman.

With the company's stock having hemorrhaged more than $60 billion in value in recent months, Dorgan said, ``Some at the top of the pyramid got rich and many at the bottom lost everything. It appears to me to be a combination of incompetence, greed, rampant speculation with investors' money and perhaps some criminal behavior.''

Sen. Barbara Boxer, D-Calif., was more blunt, telling reporters: ``I personally hope some of these people wind up in jail.''

The Justice Department is investigating Houston-based Enron for possible criminal conduct. The Labor Department and the Securities and Exchange Commission are pursuing civil investigations.

While ordinary employees were prohibited from selling company stock from their Enron-heavy 401(k) accounts, Enron executives cashed out more than $1 billion in stock when it was near its peak, lawmakers say.

And nearly 600 employees deemed critical to Enron's operations received more than $100 million in bonuses last month as the company faced a merger that unraveled and then went into bankruptcy.

Worth more than $80 a year ago, Enron's stock has tumbled to less than a dollar a share.

In addition to retirees and some 4,500 out-of-work employees, countless investors around the country have been burned by Enron's rapid descent into federal bankruptcy court in recent weeks.

Enron, which was the nation's seventh-biggest company in revenue and admired by Wall Street as a technological innovator, has acknowledged it overstated profits for four years.

The chief executive of its longtime auditor, Arthur Andersen LLP, told a House hearing last week that the accounting firm notified Enron's audit committee on Nov. 2 of ``possible illegal acts within the company.'' For the second time in less than a week, no Enron officials were present at a congressional hearing to defend the company's actions. Chairman and CEO Kenneth Lay declined an invitation to testify but told the Senate panel he would attend a future hearing. He is a friend of President Bush and a big campaign contributor.

Boxer and Sen. Jon Corzine, D-N.J., proposed a bill Tuesday aimed at preventing future Enron-style meltdowns for employees' retirement savings. It would restrict to 20 percent the amount an employee can have in any one stock in their accounts. There would be a 90-day limit on the period during which employers can bar workers from selling stock contributed by the company.

WASHINGTON -- Money. Access. A first-name relationship with President Bush that stretched back for years.

Until recently, Kenneth L. Lay, chairman and chief executive of beleaguered energy giant Enron Corp., was a fixture in Washington--a man whose entree to the highest levels of the Bush administration was considered unrivaled in the energy industry--or in any industry, for that matter.

Now, in a rapid reversal of fortune, Lay is finding out how cold and lonely Washington can turn. After filing the biggest bankruptcy in U.S. history, Lay's company is the target of numerous government inquiries, including a criminal probe into what caused the collapse that left thousands unemployed and cost investors billions of dollars.

But as the investigations gear up, the White House appears to be doing little to come to the aid of Bush's old friend or his company. Instead, the administration is trying to avoid any appearance that Lay or Enron are getting special treatment.

White House officials have been encouraged to minimize contact with the Securities and Exchange Commission even on unrelated issues, for fear it might be perceived that they were trying to intervene in the SEC's investigation of Enron's spectacular financial meltdown, according to one prominent GOP lobbyist.

Publicly, the White House is taking a hands-off posture, keeping its distance from the company as the scandal has unfolded.

"The president wants to make certain that all agencies are monitoring events and will take action as their criteria warrant," White House spokesman Ari Fleischer said earlier this month.

"In the [White House's] mind, he got in trouble, tough," the GOP lobbyist said. "It's the nature of politics: Sorry, but you're radioactive and you got yourself this way."

Campaign Checks Being Sent Back

Nor have Enron's generous campaign contributions to lawmakers slowed the bipartisan calls for congressional hearings.

Indeed, some of Enron's checks are being sent back--the National Republican Senatorial Committee said Friday that it is returning a $100,000 contribution from the company.

And Enron recently fired most of its high-profile Washington lobbyists, sharply curtailing the company's renowned clout.

Over the last year, Lay has gone from partying with the president at the inauguration to skirting congressional hearings.

"His star has certainly fallen," said Rep. Ken Bentsen (D-Texas).

Sen. Byron L.. Dorgan (D-N.D.) said, "When things were going well, the Enron executives were all over. . . . When things have collapsed, they're not to be seen anywhere."

Robert S. Bennett, a Washington attorney who represented President Clinton in the Paula Jones case and who was retained by Enron this week, said Friday that no one should rush to judgment.

"Everybody should keep their powder dry," he said.

Bennett said he is confident that Lay will appear at a future hearing.

Many members of Congress are stewing after Lay said he could not appear at a House Financial Services Committee hearing on the mess this week because he had to attend a bankruptcy hearing.

"There are a lot of unanswered questions about the actions that management took. . . . I don't think you're going to find people stepping up and defending Enron or defending Enron's management . . . as long as those questions are there," said Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, which is among those planning to hold hearings.

Lawmakers Promise Impartiality

Enron's relentless pursuit of political influence--the company has invested freely in prominent lobbyists and contributed heavily to both parties, especially the GOP--could make its fall the most explosive financial scandal in Washington since the collapse of the savings and loan empire led by Charles Keating more than a decade ago.

The political fallout in the Keating matter was widespread, tarring five key senators for their roles in trying to aid Keating.

The investigations into Enron are just getting started.

Next week, congressional investigators expect to receive 35 boxes of documents they have requested from Enron.

A Senate panel is scheduled to hold the next hearing Tuesday. In the House, GOP committee chairmen are promising to show no fear or favor in their probes.

"We're going to take this investigation wherever the facts lead us," said Ken Johnson, spokesman for Rep. W.J. "Billy" Tauzin (R-La.), chairman of the House Energy and Commerce Committee.

"We're not going to shill for anyone, and we're not going to shield anyone," Johnson said.

Rep. Richard H. Baker (R-La.), chairman of the House Financial Services subcommittee on capital markets, made it clear Friday that Lay will voluntarily appear before his committee early next year or face a subpoena. "People's lives have been ruined, fortunes lost," Baker said.

"'When you're riding high, you're everybody's friend," said Rep. Joe Barton (R-Texas), a longtime Lay friend and chairman of a House energy subcommittee. "When you win an election, everybody voted for you. When you lose an election, a lot of people look the other way and don't return your calls."

The controversy is certain to test the bounds of the relationships Lay has forged in Washington, according to former Commerce Secretary Robert Mosbacher, an old friend of Lay's who served on Enron's board in the 1980s.

"It's a tough time and a time when you need your friends," Mosbacher said. "Real friends won't [abandon him]."

At the moment, two factors may be limiting the situation's immediate political fallout. One is the attention focused on the war in Afghanistan and the search for Osama bin Laden. Another is a lack of evidence that federal regulators were influenced by Enron's ties to the White House.

But Democrats, sensing a vulnerability, already are urging Congress to explore the full range of Enron contacts with the administration and whether the government was sufficiently vigilant as the company imploded.

"I'm afraid the Bush administration would like to downplay its intimate relationship with Ken Lay and Enron executives," said Rep. Henry A. Waxman (D-Los Angeles).

Waxman has been pressing the White House for months to reveal details of Lay's contacts with top administration officials during drafting of the White House energy policy.

Some observers found Lay's no-show at the hearing this week bitterly ironic: In the Bush administration's first months, Lay appeared to be everywhere in Washington.

In the weeks after Bush's victory, he served on a transition team advising the incoming administration on energy policy. He joined a small group of business executives who met with Bush for lunch at the White House soon after he took office.

When Vice President Dick Cheney was heading the administration's energy task force, he provided Lay and other Enron executives a private 30-minute meeting--a privilege apparently afforded to no other energy company.

"As best as I can tell, Ken Lay has had unlimited access to the . . . administration," Waxman said.

Lay Took Interest in FERC Members

Lay took a particular interest in the composition of the Federal Energy Regulatory Commission, the agency that regulates electrical utilities. After Bush took office, Lay met with White House personnel director Clay Johnson to discuss vacancies on the commission, according to several published reports.

Just weeks after Bush took office, Lay spoke directly to Curtis L. Hebert Jr., the FERC commissioner Bush had appointed as board chairman Jan. 22.

In a measure of Lay's influence, Hebert asked the energy executive to support his retaining the chairman's position, according to accounts of the conversation both men later provided to the congressional General Accounting Office.

Lay suggested he would support Hebert's continuing in the job only if the chairman switched his position on an issue in which he disagreed with Enron: a matter relating to access to the electricity transmission grid, according to the GAO report.

Lay denied that he had linked his endorsement to a shift on the issue. But two top Hebert aides told the GAO that after the conversation, the chairman said to them that "he would not get Mr. Lay's support unless he changed his position."

Last summer, Hebert resigned after Bush made clear his intention to replace him as chairman with Patrick H. Wood III, a Texan supported by Enron and others.

White House officials are downplaying Lay's role in shaping their energy plan last spring.

"He did not have a consultative role in the energy plan," said Mary Matalin, Cheney's counselor. "He's obviously a longtime friend of the administration and in the business, and his meeting [with Cheney] was more courtesy than substance."

While cultivating ties with the administration, Lay did not neglect Congress.

In all this, Lay was supported by a small army of lobbyists and consultants.

According to congressional disclosure forms, Enron's Washington lobbyists included Marc Racicot, the incoming chairman of the Republican National Committee; Ed Gillespie, a former communications director at the RNC and a top communications advisor to Bush during the campaign; Jack Quinn, a former White House counsel under President Clinton; and eight Enron staff lobbyists at a Washington office led by Linda Robertson, a former Clinton Treasury Department official.

Enron also invested heavily in campaign contributions.

Since 1989, the company has contributed nearly $5.8 million to candidates, parties and political action committees, according to the Center for Responsive Politics. Seventy-three percent of the money went to Republicans.

Lay was a so-called pioneer in Bush's presidential campaign, which meant he committed to raising at least $100,000.

Lay also personally contributed more than $275,000 to the Republican National Committee during the 2000 election cycle, part of overall donations from the company to the RNC that exceeded $1.1 million.

Enron gave $100,000 to help pay for Bush's inaugural and repeatedly provided Bush with company jets to use during the campaign. Lay also made a personal contribution for $100,000 toward the inauguration.

At the same time, Enron gave $530,000 to the Democratic National Committee during the 2000 election. Lay made no personal contributions the DNC.

Beyond these financial and lobbying resources and Lay's personal connection to President Bush, the company had ties to other senior administration officials, including top White House economic advisor Lawrence B. Lindsey, a former Enron consultant; and U.S. Trade Representative Robert B. Zoellick, a former member of an Enron advisory board.

As a result, the company was widely viewed by other energy lobbyists as the most powerful industry player in the capitol.

Connections May Hurt Now

"It appears they weren't given the scrutiny that everyone else was," said Dwight Evans, lobbyist at energy firm Southern Co., an Enron rival based in Atlanta.

Another top energy lobbyist who asked not to be identified said, "They were preeminent, almost predominant with this administration. Power is the appearance of power, and, boy, did they have the appearance of power."

Now it has all come crashing down. When named as RNC chairman recently, Racicot said he would continue his lobbying practice--but pointedly noted that he would not do more work for Enron. Racicot did not return phone calls.

The company recently terminated its contracts with Quinn and Gillespie and all of its other outside Washington lobbyists.

The prominent energy lobbyist said that as those investigations proceed, Enron's connections may come back to haunt it.

It's likely, the lobbyist predicted, that members of Congress will have to be doubly tough on Enron to prove their independence from a company that had wielded so much influence in the capitol.

"I think the Republicans are going to have to jump on Enron to prove that they are not part of the Enron cabal," one lobbyist said. "It's going to be worse than it would be if they never had the influence."