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To: stockman_scott who wrote (46360)	1/14/2002 5:37:00 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

Enron employee warned of problems in Aug-lawmakers By Kevin Drawbaugh WASHINGTON, Jan 14 (Reuters) - An Enron Corp. (NYSE:ENE - news) employee warned the company's chairman in August of accounting problems and a ``veil of secrecy'' around certain partnerships that later contributed to Enron's filing the largest bankruptcy in U.S. history, congressional investigators said on Monday. The unidentified employee wrote in a letter to Enron Chairman Kenneth Lay of several areas of concern, said House Energy and Commerce Committee Chairman Rep. Billy Tauzin and Rep. James Greenwood, head of the investigations subcommittee. The employee questioned the involvement of former Enron chief financial officer Andrew Fastow in one partnership; the accounting for three others; the public disclosure of the partnerships; and ``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 lawmakers said. The employee also described a ``veil of secrecy'' around some of the partnerships, the lawmakers said in letters to Enron and its auditor Andersen seeking more information. Houston, Texas-based Enron, once ranked No. 7 on the Fortune 500 list of large corporations, is being probed by six congressional committees, the market-regulating Securities and Exchange Commission and the Labor Department. The Justice Department has launched a criminal probe of the company. Once the world's largest energy trader, Enron plunged in mere weeks from Wall Street stardom to making the largest bankruptcy filing in U.S. history on Dec. 2. Its downfall threw thousands out of work and devastated investors. The employee complained to Lay that ``several senior Enron employees 'consistently and constantly' questioned the corporation's accounting methods to senior Enron officials, and directly to Jeffrey Skilling, Enron's former chief executive officer,'' of transactions involving LJM, one of the Enron partnerships, said Tauzin, of Louisiana, and Greenwood, of Pennsylvania. Enron executives set up many off-the-balance partnerships -- known as special-purpose entities -- to keep debt off the company's highly leveraged balance sheet. When transactions involving the partnerships went sour, investors began asking questions, triggering a crisis in investor confidence and credit downgrades that led to bankruptcy court on Dec. 2. The episode sapped the life savings of many Enron employees whose 401(k) plans were heavily invested in Enron stock, while top executives allegedly pocketed fat profits by selling ahead of a dizzying plunge in the share price. biz.yahoo.com