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Non-Tech : The Enron Scandal - Unmoderated
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To: The Duke of URL© who wrote (2572)12/15/2002 4:31:20 PM
From: stockman_scott   of 3602
 
Enron probe expanding to telecom

13:53 EST Friday

The Wall Street Journal reported Friday that federal prosecutors have expanded their investigation of former Enron Corp. President Jeffrey Skilling, focusing on the role he and other executives played in the company's unsuccessful broadband telecommunications business.

Until now, the focus of federal investigations has been primarily on Enron's energy business and its off-balance-sheet partnerships, which involved the company's former Chief Financial Officer Andrew Fastow and several other financial executives.

But the broadband probe is likely to take a closer look at Kenneth Rice, the executive who headed that unit and who was named in an early shareholders' lawsuit seeking to freeze millions of dollars that top Enron executives reaped by selling off large amounts of the company's stock shortly before its value plummeted. Rice topped the list, walking away with more than $70 million.

Skilling and other Enron executives told shareholders in 2000 that the company's telecom venture would be worth $70 billion. Their touting of this business helped push Enron's stock price above $80 a share by mid-2000.

But in 2001, the company shuttered its broadband unit and took a huge write-off for its losses, which helped propel Enron into bankruptcy.

Investigators are probing Enron's sales and swaps of broadband capacity and its accounting of several broadband deals and ventures, as well as the timing of the stock sales by Skilling, Rice and other executives, The Wall Street Journal reported.

© 2002 American City Business Journals Inc.
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