During a day of drama in Congress yesterday, whistleblowers suggested former CEO, Jeff Skilling knew of Enron's troubles. His four ex-colleagues pleaded the fifth. Skilling, internal committees and external auditor Andersen claimed innocence. The only concurrence was: 'don't blame me'.
First Enron’s former executives Andrew Fastow and Michael Kopper and current officers Richard Buy and Richard Causey refused to testify.
Andersen partner Tom Bauer, who approved Enron’s Chewco special partnership entity (SPE) in 1997 said: ‘Enron withheld information and mislead me. If I had information the accounting advice would have been different.’ He added: ‘On November 2, I was appalled to discover a document I’d not seen before.’
Jordan Mintz, Enron’s general counsel for corporate development said he secretly hired an outside law firm to help unravel SPE concerns. He also tried to get Skilling to approve the controversial ethics waiver approving Fastow’s double role.
The chairmen of Enron’s audit and finance committees, also board members, thought senior management would review such a document. There was a power cut during a relevant board meeting so Skilling isn’t sure if he was in the room when the waiver was discussed.
President and COO Jeff McMahon said he told Skilling his worries about SPE conflicts last March. Three days later McMahon was given a job change.
Skilling, a self-professed ‘controls freak rather than a control freak’ repeatedly denied knowledge the SPEs were improper and insisted that McMahon’s move was unrelated.
‘The failure of Enron was due to a run on the bank. The company was solvent but not liquid enough,’ he explained.
Skilling, the audit committee chair, and the finance committee chair all said that approvals by outside counsel and accountants suggested controls were working.
