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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Michael L. Voorhees who wrote (528)	1/15/2002 4:10:35 PM
From: Karen Lawrence	Read Replies (1) \| Respond to of 5185

Enron Scandal Deepens; Auditor to Be Fired NEW YORK (Reuters) - The growing scandal over the collapse of Enron Corp. deepened on Tuesday, with accounting firm Andersen saying its lead partner for auditing the energy trader had ordered documents destroyed after learning federal regulators wanted to see them. Andersen, which has been under fire for its handling of Enron's books, said it would fire the partner, David B. Duncan. The company also said it placed three other partners responsible for the Enron work on leave. Andersen said ``thousands'' of e-mails and ``large numbers'' of paper documents relating to Enron were destroyed after Duncan learned on Oct. 23 of a request by the Securities and Exchange Commission (news - web sites) for information on the Enron audit. ``Although the firm is still working to collect all the facts, it has learned that at the direction of the lead partner an expedited effort to destroy documents in Houston was undertaken,'' Andersen said in a statement. The announcement came as the New York Stock Exchange (news - web sites) suspended trade in Enron and moved to delist its stock and as U.S. lawmakers stepped up their investigation of the company's tangled finances. The Houston-based company on Dec. 2 filed the largest bankruptcy in U.S. history. Shares of Enron last traded at 67 cents on Jan. 10, a far cry from a record $90.56 in August 2000. CONGRESSIONAL SCRUTINY Maryland Democratic Sen. Paul Sarbanes (news), chairman of the powerful Senate Banking Committee, on Tuesday requested investigations into financial reporting and employee retirement funds in company stock, matching a White House call for reviews in the same areas. Sarbanes asked the investigative arm of Congress, the General Accounting Office (news - web sites), to examine laws governing employee stock ownership in retirement funds such as 401(k) plans, as well as how corporations report their finances to the public. A sharp decline in Enron's share price last fall sapped the savings of thousands of the fallen energy trader's employees whose 401(k) accounts were heavily invested in Enron stock. Similar losses have been seen in recent years at other firms. Enron employees have suffered losses topping $1 billion in their retirement accounts. Enron's 401(k) retirement plan had prevented workers from touching their shares before age 54, and in the weeks before the company's bankruptcy filing all accounts were frozen because the company changed plan administrators. ``Investment of retirement funds in company stock can enable employees to share in the fruits of their labor -- as reflected in a company's stock price. However, the reported results of Enron's bankruptcy raise significant issues about the adequacy of our laws and their enforcement,'' Sarbanes said in a statement. He also stressed the need for accurate corporate financial reporting. ``Accurate and honestly presented financial information is essential to the efficiency of our capital and security markets, yet in recent years costly accounting irregularities have proliferated,'' Sarbanes said. ANDERSEN'S PREDICAMENT Questions about Enron's financial reports and their review by its auditor, Andersen, are at the heart of the SEC probe. The move by Andersen to fire lead partner Duncan is the accounting firm's first move to identify individual errors in the auditing of Enron. Andersen as a whole faces ruin over lawsuits attacking its handling of Enron, with third-party insurance unlikely to cover potential payouts, according to industry experts. The partners put on leave are Thomas H. Bauer, Debra A. Cash and Roger D. Willard. Four other Houston-based were also stripped of management responsibilities, Andersen said: D. Stephen Goddard Jr., Michael M. Lowther, Gary B. Goolsby and Michael C. Odom. In addition, Swiss bank UBS AG, which won an auction to buy Enron's energy trading operations, on Tuesday said it will pay Enron 33 percent of future profits from the company's one-time crown jewel. Enron said it would receive no upfront cash from UBS.

To: Michael L. Voorhees who wrote (528)	1/16/2002 1:40:47 AM
From: Mephisto	Respond to of 5185

Poppy Bush and Ken Lay are neighbors? I didn't know....... And no one told W what was going on? (LOL)

To: Michael L. Voorhees who wrote (528)	1/16/2002 3:39:51 PM
From: Mephisto	Read Replies (1) \| Respond to of 5185

Bush, the corporations' flag-carrier Enron's collapse exposes the folly of his cash-for-influence policy " This is precisely how Bush mixed business and politics when he was governor of Texas.The oil and gas companies who supported his candidacy were given free rein, at secret meetings with Bush officials, to write their own rules when it came to state policy on emissions control. They, not surprisingly, chose a voluntary scheme with equally unsurprising consequences for air quality in Texan cities. " Julian Borger Tuesday January 15, 2002 The Guardian The familiar paraphernalia of political scandal is being assembled in Washington. At the last count, two criminal inquiries and six congressional hearings were scheduled on the Enron scandal. In the legislature, reduced by the war on terrorism to the role of cheerleader, everyone wants to be a part of it. Both parties know how the rituals of scandal can define a presidency. Reagan managed to shrug off most of the damage caused by the Iran-contra affair, while Clinton was overwhelmed by the Monica Lewinsky saga and is unlikely to have an airport named after him. Now it is George Bush's turn. Enron, a gigantic Texan energy trading firm and the biggest single sponsor of his political career, collapsed dramatically last month amid allegations of fraud and insider trading. The inquiries will ask familiar questions: what did the administration know and when did it know it? Was there a cover-up and did the Bush team help? These are the staples of Washington scandal, but this time they may be the wrong questions. They focus on whether anyone in the administration broke the rules. The whole point of the Enron affair is that it discredits the rules of the game. It exposes the institutionalised corruption at the heart of US politics - a casual exchange of money and power that Bush has made his trademark. The seamy subject of campaign finance briefly captured the attention of the US electorate in the early months of the Bush presidency when it was apparent that big campaign contributors were being paid back one presidential decree at a time. Enron will bring it back into focus. Investigators are poring over Enron's contacts with the administration last autumn, when the company was fighting for its life, looking for signs of illegal meddling in the market. In fact, the big trade-off for the company's campaign contributions was made months earlier. Enron executives had six meetings with the vice-president, Dick Cheney, and his staff when he was drawing up the administration's energy plan in the spring, a fact that has surfaced only since the company went bust. The White House has refused to tell Congress which other industrial magnates it consulted in drawing up the plan, which is broadly speaking a polluters' charter. Few, if any, environmentalists were invited. This is precisely how Bush mixed business and politics when he was governor of Texas. The oil and gas companies who supported his candidacy were given free rein, at secret meetings with Bush officials, to write their own rules when it came to state policy on emissions control. They, not surprisingly, chose a voluntary scheme with equally unsurprising consequences for air quality in Texan cities. Governor Bush introduced sweeping tort reform, making it harder for ordinary Texans to sue corporations. And he appointed Pat Wood, nominee of Enron's chairman, Ken Lay, as head of the state's public utility commission, where he promptly pushed ahead with the deregulation the energy companies had been asking for. Last year, after Lay failed to persuade the head of the federal energy regulatory commission to agree to Enron's views, Bush gave Wood the chairman's job. Of course, this constant barter of cash for influence represents politics as usual. Some Democrats also took serious amounts from Enron, but as a party they are also beholden to other interest groups, like unions and minorities, tempering corporate control. In the president's case, corporate influence appears almost unmitigated. Bush has pushed through the biggest tax cuts in a generation, heavily weighted to the wealthiest 5%, and backed an economic stimulus package brimming with corporate tax breaks and amnesties. This was marketed along with the old palliative, the trickle-down effect: tax-breaks for corporations and the wealthy create jobs further down the economic food chain. Bush portrayed his policies as anti-recessionary before September 11, and as downright patriotic afterwards. The message was a familiar one. What's good for Enron (or insert your corporate name here in return for the appropriate campaign donation) is good for America. The Enron debacle is potentially so dangerous for Bush because it makes it painfully clear that the old equation does not hold. The Enron executives got rich even as their company was plunging into the abyss, taking its employees with it. It is the ultimate nightmare for the corporate welfare state, for which Bush has made himself flag-carrier in chief. The executives in this case have shown themselves to be anything but patriotic. They were revealed instead as rapacious asset-strippers. The Democratic party has to seize the Enron affair with both hands. With the mid-term congressional elections about to take off, it might just shake the nation out of its patriotic trance and revive a debate over how US politics is bought and paid for. julian.borger@guardian.co.uk