Enron finance team wasn't watched

Sunday, February 3, 2002

HOUSTON -- An internal probe into Enron Corp.'s finances spread the blame for the company's downfall from greedy architects of questionable partnerships to executives, directors and auditors who failed to watch them.

The probe, released late Saturday and led by University of Texas School of Law Dean William Powers Jr., said top members of Enron's financial team invested in or created partnerships that facilitated accounting abuses while earning them millions.

In one case, the report said, former chief financial officer Andrew Fastow made about $4.5 million from a $25,000 investment in two months.

The partnerships were touted within the company as money-saving vehicles that bent rules without breaking them, the report said. They hid debt that became apparent when the accounting complexity veered out of control.

The report said former chief executive officer Kenneth Lay and Enron's directors weren't fully informed about the scope of employee involvement in some of the partnerships.

Powers' report also said Chief Accounting Officer Richard Causey, Chief Risk Officer Richard Buy and Jeff Skilling, former chief executive officer, as well as the board failed to rigorously control how the partnerships operated.

Enron spokeswoman Karen Denne declined comment.

The report concluded the partnerships grew from a flawed idea and other problems culminated in "overreaching in a culture that appears to have encouraged pushing the limits."

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