Report: '97 Enron Tape Parallels Scandal
12/16/2002 13:51:56 EST
Five years before Enron collapsed in a big accounting scandal, an executive joked at a party about making "a kazillion dollars" through something he humorously dubbed "hypothetical future value accounting," the Houston Chronicle reported Monday.
Videotaped jokes by some former Enron executives at a January 1997 party bear ironic parallels to events that helped bring down the energy conglomerate, the newspaper said.
The videotape, of a going-away party for former Enron President Rich Kinder, features nearly half an hour of absurd skits, songs and testimonials by executives and prominent citizens - including President Bush, the newspaper reported.
Enron, which two years ago ranked No. 7 on the Fortune 500, declared bankruptcy on Dec. 2, 2001, haunted by shady accounting, hidden debt and inflated profits. Stock that had traded at $90 in August 2000 plummeted to pennies. Thousands of people were laid off.
The Chronicle did not identify the source of the videotape.
At the party, then-Texas Gov. George W. Bush pleaded with Kinder: "Don't leave Texas. You're too good a man." And his father, former President Bush, told Kinder, "You have been fantastic to the Bush family. I don't think anybody did more than you did to support George."
In one skit, former administrative executive Peggy Menchaca played the part of Kinder receiving a budget report from then-President Jeff Skilling, who played himself.
When the pretend Kinder expressed doubt that Skilling could pull off 600 percent revenue growth for the coming year, Skilling described how it could be done.
"We're going to move from mark-to-market accounting to something I call HFV, or hypothetical future value accounting," Skilling joked as he read from a script. "If we do that, we can add a kazillion dollars to the bottom line."
Skilling abruptly resigned from Enron in August 2001 before news of its troubles surfaced, and has professed ignorance about much of what went on under his watch.
Three Enron workers have pleaded guilty to charges ranging from fraud to false tax returns, and former chief financial officer Andrew Fastow has been indicted on 78 charges.
On the tape, Richard Causey, the former chief accounting officer, referred jokingly to a practice that is frowned upon by securities regulators.
"I've been on the job for a week managing earnings, and it's easier than I thought it would be," Causey said. "I can't even count fast enough with the earnings rolling in."
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