It was certain to come up sooner or later. Enron was invoked by the committee chairman, Henry Waxman, in questioning Angelo Mozilo, chief executive of Countrywide Financial about his sales of stock.

Elizabeth Olson is blogging live from the House hearing on the compensation of mortgage C.E.O.'s:

Representative Waxman, the California Democrat, notes that in October 2006, before the crisis in the mortgage market erupted, Mozilo was allowed to sell 350,000 shares of Countrywide per month. That was later amended to allow to sell 450,00 shares, then 580,000 shares. He ultimately sold 5.8 million shares.

Asked about those sales, Mozilo says they were done to reduce his holdings because of his approaching retirement.

Waxman: "Countrywide stock fell 90 percent since then... You were selling shares and borrowing money to buy stock back and keep the price up ... How did this help shareholders?"

Mozilo: "I'd like to frame it the way it was. I started in 2004 -- I could have sold all the shares all at once. They were options I had held for more than 10 years and were expiring. There is absolutely no relationship between the buyback of stock and my sales."

"The buyback of stock went on for more than a year. The question was what to do with our capital. We came to a point where the company was exceedingly profitable and the buyback was designed to increase the return equity for our shareholders. Tthe purpose was to benefit the shareholders."

Waxman notes that Countrywide's stock price after February 2007 plunged 87 percent from its peak and that board members also sold shares before that slide.

Mozilo replies that his stock was sold under prearranged selling orders.

Waxman asks John Finnegan, chairman of Merrill Lynch's compensation committee, "would this kind of transaction raise a red flag ... the ability to sell $150 million worth of stock.? "

Finnegan: "I have no reason to believe our board would think it inconsistent to sell stock while the company was doing a stock buyback," adding that it would be a question of perception.

Waxman later goes on to say "With Enron, the executives were selling the stock, and they had knowledge that no one else had."

"Appearance is not good if you are telling investors to buy stock at same time you are selling your own stock," Waxman says.

The executives being questioned received some support and sympathy from the Republican members of the committee. Representative Darrell Issa asked several whether "they have skin in the game" - in other words, whether they still own stock in their former companies, and they all said yes.

Another Republican member, Representative Tom Davis, said he would like to find a villain to blame for the mortgage crisis but said they were not the ones.

A Democrat on the committee, Representative Eleanor Holmes Norton, questions why a compensation consultant was hired to advise Mozilo.

She asks Snyder, the Countrywide compensation committee chairman: "Why does it make sense that you hire one consultant, then you hire another and adopt the compensation package of mr. mozilo's agent? Why was it more appropriate to adopt a compensation package that was more expensive?

Synder responds that in his view, Mozilo's compensation package was reduced and that the board had advice from its consultant.

Representative Issa disagrees with Norton's line of question and asks Snyder a rhetorical question: "You came to a common number, and agreed on it."

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Elizabeth Olson