Enron directors backed off-book practices
Washington Post
Published Jan 31 2002
WASHINGTON, D.C. -- Members of Enron Corp.'s board of directors received detailed briefings as early as four years ago about the purpose and structure of controversial partnerships whose losses triggered the company's bankruptcy, according to minutes of the meetings.
The minutes, which cover four board meetings in 1997 and 1999 and three finance committee meetings in 2000, suggest that board members approved aggressive accounting actions, including moving debt off the company books.
A dozen congressional committees as well as the Justice Department and the Securities and Exchange Commission are investigating Enron's collapse, which cost investors and employees billions of dollars. A focus of the inquiries is whether Enron hid debt and inflated its profits by using the private partnerships run by its chief financial officer.
Individual Enron board members, who themselves are being sued and investigated, have said little publicly about their role in the transactions. The minutes, made available to the Washington Post by a source critical of the board, suggest that the partnerships were a key part of Enron's growth strategy and show they were regularly reviewed by the directors.
When it was reported last fall that Andrew Fastow, the Enron CFO, made $30 million running partnerships with names such as LJM, Raptor and JEDI, then-chairman Kenneth Lay announced that the board was setting up a special committee to investigate. The minutes show that members of that special committee attended board meetings in which Fastow described the intricacies of the entities.
Sources said the committee's report, which is expected to be completed as early as Friday, will say that while the Enron board approved the partnerships, management and auditors withheld key information. That is expected to be the key element of the defense that will be offered by Lay and board member William Powers when they testify before Congress Monday, sources said. |
