- WASHINGTON - The executive
who raised the alarm about Enron's accounting practices six months ago
pointed the finger at several former executives Thursday, saying they
knew about partnerships used to boost earnings and keep millions in debt
off the company's books.
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- Enron exec points finger "They knew about the vehicles,"
Sherron Watkins said in her testimony before the U.S. House of Representatives
Energy and Commerce Committee, referring to the partnerships.
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- Watkins is vice-president of corporate development at
Enron. She was the employee who wrote a letter to former chairman Ken Lay
outlining the accounting web that ultimately pulled the company into the
biggest bankruptcy in American history and wiped out Billions of dollars
of investors' savings.
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- "I think that certain people at Enron thought that
these (partnerships) were complex, but clever, and that they were legitimate,"
she said.
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- Watkins' statements stood in stark contrast to those
of former Enron CEO Jeffery Skilling, who testified last week that he did
not know that the partnerships were being used to hide debts.
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- Watkins said she believes Skilling, former chief financial
officer Andrew Fastow, along with the company's auditor, Arthur Andersen,
and the Vinson & Elkins law firm, did "dupe" Lay and Enron's
board.
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- After writing her letter of warning to Lay, Watkins testified
that she was told Fastow wanted her fired.
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- In a second memo to Lay written on Oct. 30 last year,
Watkins said that "we need to come clean" and disclose the company's
losses. Watkins' memo, which was released by the committee on Wednesday,
included "disclosure steps to rebuild investor confidence" and
putting the blame on Skilling, Fastow and Enron's auditors and lawyers.
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- Lay initially agreed to Watkins' strategy, but reversed
his position the next day.
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- In her testimony on Thursday, Watkins said she tried
to assist Lay as the financial crisis was erupting because she thought
he "did not understand the gravity of the situation the company was
in."
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- Watkins was one of the few current or former Enron executives
willing to testify before Congress. Earlier this week, Lay invoked his
Fifth Amendment right to avoid self-incrimination when he was subpoenaed
to testify.
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- Also on Thursday, Enron fired its chief accounting officer
Richard Causey and chief risk officer Richard Buy, effective immediately.
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- "The new Enron and its board are committed to ensuring
that communication within the company is open and free-flowing, particularly
as to any matters of professional concern regarding Enron's business
affairs," Stephen Cooper, the company's acting chief executive officer
and chief restructuring officer, said in a release.
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- Causey and Buy were fired as as part of a review and
evaluation of the information and allegations in the report of the Special
Investigative Committee of the board of directors, the company said.
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- Written by CBC News Online staff http://cbc.ca/stories/2002/02/14/enron_020214
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