Tags: Congress | Wants | Key | Enron | Records

Congress Wants Key Enron Records

Sunday, 20 January 2002 12:00 AM

A day after House energy and commerce committee investigators questioned Arthur Anderson partner David Duncan, chairman Billy Tauzin, R-La., called on Enron’s former accounting firm to produce additional records relevant to a Feb. 5 meeting in which Andersen executives discussed some of the Enron accounting methods.

In a letter dated Jan. 17 to Andersen Managing Partner and CEO Joseph F. Berardino, the committee asked for any and all documents that followed a telling e-mail from Andersen executive Michael E. Jones to partner David B. Duncan summarizing the meeting, which was held by telephone conference between Chicago and Houston.

Duncan was recently fired for allegedly ordering the destruction of documents.

Investigators say that February 5, 2001 may represent the earliest date that senior Andersen officers knew about serious problems with Enron. Andersen, however, has maintained that it was unaware of such problems until August.

The Jones notes, however, indicate that there were "significant” discussions about potential areas of concern, including:

A second requested document is an Aug. 21, 2001 memorandum from Anderson audit partner James Hecker to "the files,” copying other senior Anderson partners.

Hecker notes that Enron Vice President Sherron Smith Watkins had contacted him the day before with questions and concerns about "the propriety of accounting for certain related-party transactions” with LJM.

According to committee investigators, the memorandum lists Ms. Watkins’ concerns, including questions surrounding the formation, operation, and financial statement disclosure of LJM.

Ms. Watkins, said committee investigators, also informed Mr. Hecker that "she was concerned enough about these issues that she was going to discuss them with Ken Lay, Enron’s Chairman on Wednesday, August 22, 2001.”

After his discussion with Ms. Watkins, said investigators, Mr. Hecker relayed her concerns that same day to Andersen partner Bill Swanson (head of the Houston office audit practice), and Andersen Enron engagement partners David Duncan and Debra Cash.

Michael Odom, Andersen’s risk management practice director for the Houston office, also was informed of this discussion on August 21, 2001. According to the memorandum, it was agreed that they would consult with Andersen’s legal advisor "about what actions to take.”

Among other items, the Jan. 17 letter asks Anderson to produce to the committee all records relating to any action taken as a follow-up to what was discussed as a result of Ms. Watkins’ phone call to Mr. Hecker.

The letter also requests the memorandum created by Mr. Duncan concerning his recollection of events relating to Ms. Watkins’ allegations.

Despite the apparent concerns voiced in February, two months later Arthur Anderson gave Enron an accounting thumbs-up, documents show.

The Jones e-mail also reported that Andersen was considering dropping Enron as a client.

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A day after House energy and commerce committee investigators questioned Arthur Anderson partner David Duncan, chairman Billy Tauzin, R-La., called on Enron's former accounting firm to produce additional records relevant to a Feb. 5 meeting in which Andersen executives...
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2002-00-20
Sunday, 20 January 2002 12:00 AM
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