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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (59484)	2/27/2006 2:28:07 PM
From: Skywatcher	Respond to of 362574

ah...correct, Don Knotts this weekend...bummer he and Louis Nye on the Steve Allen tonight show were 2 of the VERY BEST in history that's a CD I would buy in a second

To: Jim Willie CB who wrote (59484)	2/27/2006 10:39:14 PM
From: stockman_scott	Respond to of 362574

Enron witness: Reserves shifted ______________________________________________________________ by Claire Poole in Houston TheDeal.com 27, Feb 2006 A government witness in the fraud and conspiracy trial of former top executives at Enron Corp. testified Monday, Feb. 27, that he dipped into reserves, set aside to settle a troubled contract, to boost earnings and meet Wall Street projections. The witness, Wesley Colwell, the former chief accounting officer for Enron North America, Enron's largest unit and the division that included its energy trading business, said he was asked twice to pull $7 million from a $70 million reserve account so the company could beat analysts' earnings consensus by 2 cents per share in the second quarter of 2000. "Did you use reserve accounts to fraudulently report Enron's earnings?" asked Sean Berkowitz, an assistant U.S. attorney from Chicago who is also head of the Justice Department's Enron Task Force. "Yes," he replied. "It is improper if it's not based on any circumstance [other to boost earnings]." Colwell said chief accounting officer Richard Causey asked him to shift the monies from reserves to earnings at the request of former CEO Jeffrey Skilling after the quarter closed June 30 — $7 million on July 17 and another $7 million on July 19. "Should corporate have the ability to request changes?" Berkowitz asked him. "Not in order to change earnings targets," Colwell replied. Colwell testified that 34 cents did not accurately reflect Enron's earnings for its business operations for the second quarter, which had originally been estimated at 32 cents. "Why not?" Berkowitz asked. "They were based on a desire to increase earnings by two 1-cent increases," Colwell replied. "Who wanted to beat the Street by 2 cents?" Berkowitz followed up. "Jeff Skilling," Colwell replied. Colwell was later asked about a discussion he had about trading profits with Enron North America chief operating officer John Lavorato, which resulted in a strenuous objection from the defense as hearsay. After discussing it with Judge Simeon Lake III at the bench, Berkowitz continued his questioning, and Colwell said Lavorato told him he had discussed with Skilling where he wanted to "land the quarter." Berkowitz also showed Colwell an e-mail he sent to Enron North America CEO David Delainey Jan. 2, 2001, after the fourth quarter and year was over that "we will likely get some pressure to overproduce more for the purpose of breaking the analyst estimates" and will make adjustments to its reserves figure necessary to "make our targets as promised to corporate." Colwell testified that the reserve adjustments "had no economic substance" and that Enron "backward engineered" its fourth-quarter 2000 earnings to meet Skilling's earnings targets. Asked later if what Colwell or corporate did was appropriate, he said: "We should have independently reported what we earned." Colwell testified that Arthur Andersen would have asked what was in the reserve number but not about monies being shifted out of it. What would the accounting firm had done if it knew the monies were being shifted to meet earnings targets and earnings were "backward engineered? "They would have had to report it to the audit committee," he said. "They would not be able to give Enron a clean opinion." Colwell is the government's fifth witness in the fifth week of trial and the first accountant to bring damning information against the defendants to the stand. The previous accounting witness, Terry West, only testified about certain documents used in Enron's budget planning process. Colwell, 46, hasn't pleaded guilty to a crime but agreed to pay the Securities and Exchange Commission $500,000 for manipulating earnings at Enron and is cooperating with prosecutors. As part of his punishment, he may not serve as a director or officer of a publicly traded company and the state of Texas has revoked his license as a certified public accountant. He now works as a business consultant. Colwell worked at Arthur Andersen for 17 years before joining Enron in September 1999 to help Causey with transactions work and was promoted to chief accounting officer at Enron North America six months later, where he worked until early 2002. Colwell, who nervously cleared his throat during the beginning of his testimony and was so soft-spoken Lake repeatedly asked him to speak into the microphone, later held his own when one of Skilling's defense attorneys, Randy Oppenheimer of O'Melveny & Myers LLP, cross-examined him. Oppenheimer had Colwell admit that estimating the amount that should go into reserves is "judgmental" and based on moving targets and that monies often were moved out of such accounts if they were "overreserved" according to Enron policy. But he couldn't convince him to agree that a lot of changes were made to "true up" a reserve account (only if they were "legitimate," Colwell said). "No one told you to misuse the reserve account?" Oppenheimer asked him. "I was told to come with $7 million and then come up with another $7 million," Colwell said. "Are you an upstanding individual?" Oppenheimer at one point asked Colwell. "I try to be," he said. Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to auditors, while his co-defendent, former chairman Kenneth Lay, faces seven counts of fraud and conspiracy. Both face decades in prison.