Congressmen cry foul in Enron's self-investigation
By JULIE MASON
Copyright 2002 Houston Chronicle Washington Bureau
Feb. 1, 2002, 9:10PM
WASHINGTON -- Lawmakers on Friday sought to discredit a pending internal investigation from Enron Corp., saying the effort is already compromised by a lack of independent oversight.
The concern centers on an upcoming special committee report from Enron about the controversial use of special partnerships that contributed to the company's collapse.
Lawmakers noted that Herbert Winokur, a board member who recommended approval of many of the partnerships, is now serving on the three-member committee investigating those transactions.
"You can understand why disinterested observers might conclude that the report's independence, or at least the appearance of independence, has been compromised," Rep. John Dingell, D-Mich., wrote to William Powers, the University of Texas School of Law dean who is heading up the investigation.
The letter also was signed by Rep. Peter Deutsch, D-Fla., ranking member of the subcommittee on oversight and investigations.
Mark Palmer, spokesman for Enron, said the three-member committee issuing the report also includes two who were not on the board when the partnership decisions were made.
"I think the rationale behind Winokur being on the committee is that he does have knowledge of the company, going back a long time," Palmer said.
Calls for comment to Powers and the committee's outside counsel were not returned Friday.
Powers is scheduled to testify Monday before the House Financial Services Committee, and on Tuesday before the House Energy and Commerce Committee, where Dingell is a ranking member.
The internal Enron report is expected to focus the blame on former executives Jeff Skilling and Andrew Fastow and the company's auditors, according to sources familiar with the investigation.
The report also is expected to say that Fastow and Skilling, along with the accounting firm of Arthur Andersen, failed to give Enron's board of directors adequate information on the nature of the partnerships.
Though Enron has acknowledged the board approved the formation of the partnerships and many of the deals, officials say the report will claim vital details were withheld.
In the letter to Powers, the lawmakers noted that Winokur had a direct role in approving the controversial partnerships and also in recommending that policies be waived so Fastow, former chief financial officer, could serve as general partner to the outside entities.
The lawmakers note Winokur's prominent role in a number of deals at Enron, and warn that the appearance of conflict is likely to be among the questions posed to Powers on Capitol Hill.
"Mr. Winokur is essentially investigating his own actions and approving or disapproving the resulting report," Dingell and Deutsch noted.
Allegations of potential conflicts of interest have been a repeated theme.
Among the numerous lawmakers now investigating Enron who accepted money from the company in the past are Dingell, who received $9,000 between 1989 and 2001, and Deutsch, who received $2,000. More than 10 congressional investigations are under way. |
