same story from BBC: Enron chief 'was warned of trouble'
Enron chairman Kenneth Lay was warned in August 2001 of the accounting irregularities that brought the once-mighty energy trading company to its knees, according to US Congressional investigators.
Evidence before the House of Representatives' Energy and Commerce Committee shows an employee wrote a letter to Mr Lay, pointing out the questionable nature of some of the partnerships in which other Enron executives were involved, members of the committee said.
Among other things, committee chairman Billy Tauzin and investigations subcommittee chairman James Greenwood said, the unidentified employee warned Mr Lay that the chief financial officer, Andrew Fastow, was involved in one of the partnerships.
Mr Fastow is accused in a law suit of selling 95% of his stock in the three years before the company's collapse.
In all, 28 of Enron's senior management allegedly sold off nearly half their collected holdings before the company's plight went public, realising $1.1bn.
Three other partnerships were mentioned in the letter, along with "the potential impact on Enron's financial statements due to the decline of Enron's stock and the merchant investments placed in these entities".
The partnerships - designed to keep debt off the balance sheet - were shrouded in a "veil of secrecy", the letter warned.
And according to Mr Tauzin and Mr Greenwood, it explained that several senior employees had "consistently and constantly" questioned Enron's accounting methods.
Their worries were directed, among other people, to the company's then chief executive, Jeffrey Skilling.
The House Energy and Commerce Committee is just one of six congressional committees looking into the downfall of Enron, once the seventh biggest company in the US. |
