Corp-Ethics.com - Report: Enron whistleblower condemns Lay

Company	Enron [Company Info]
	Track this Company (an email will be sent to you everytime a report is filed about this company)

Date	Issue	Title
16th Mar 2006	Fraud Investigation	Enron whistleblower condemns Lay

Report

The executive who first raised concerns about financial malpractice at Enron said an internal investigation into accounting procedures was "bogus".

Testifying at the trial of Ken Lay and Jeffrey Skilling, Sherron Watkins said she first raised doubts about Enron's accounting methods in August 2001.

"Accounting just doesn't get that creative," she said, referring to structures used by Enron to hide debts.

Ms Watkins has become a well-known figure in the US after testifying at a Congressional hearing into Enron's collapse in 2002.

Ms Watkins testified she met Mr Lay to express concerns about financial structures managed by her boss, chief financial officer Andrew Fastow.

Ms Watkins had previously sent Mr Lay an anonymous memo questioning the use of off-balance sheet financial partnerships which were then running up huge losses.

In the memo, which she read out in court, she had expressed concerns that Enron could "implode in a wave of accounting scandals".

She added: "This was not just aggressive accounting, it was fraudulent accounting. I couldn't believe we had done it."

Ms Watkins acknowledged that, following their meeting, Mr Lay had ordered an investigation into her claims and ultimately had the off-balance sheet partnerships dissolved.

However, she said the investigation was flawed, since it was carried out by the firm's own auditors, who had approved the original transactions.

Under questioning, Ms Watkins admitted that she had sold shares worth $17,000 in 2002 after learning of the firm's financial problems and that this action was improper.

Ms Watkins left Enron in 2002 and has since collaborated on a book about the firm's bankruptcy.

During 2002's Congressional hearing, it emerged that Enron had considered sacking Ms Watkins after she raised concerns about its financial position.

Other Reports on Enron
Date	Issue	Company	Report
26th Sep 2006	Fraud Investigation	Enron	Fastow gets six-year term
13th Aug 2006	Fraud Investigation	Enron	Prosecutors raise Enron boss fine
25th May 2006	Fraud Investigation	Enron	Lay and Skilling guilty
15th May 2006	Fraud Investigation	Enron	Enron bosses 'stole to pump egos'
11th May 2006	Fraud Investigation	Enron	Judge deals blow to Enron accused
26th Apr 2006	Fraud Investigation	Enron	Enron feared witch hunt, Lay says
24th Apr 2006	Fraud Investigation	Enron	Lay 'devastated' by Enron failure
18th Apr 2006	Fraud Investigation	Enron	Skilling defends Enron share sale
13th Apr 2006	Fraud Investigation	Enron	Skilling slams Enron prosecutors
12th Apr 2006	Fraud Investigation	Enron	Enron 'held no cookie jar fund'
11th Apr 2006	Questionable Practice	Enron	Skilling denies cover-up at Enron
10th Apr 2006	Fraud Investigation	Enron	I'm innocent says ex-Enron chief
3rd Apr 2006	Fraud Investigation	Enron	Key Enron witness 'lied in court'
22nd Mar 2006	Fraud Investigation	Enron	Enron treasurer tells of 'lies'
14th Mar 2006	Fraud Investigation	Enron	Key Enron witness 'duped bosses'
9th Mar 2006	Fraud Investigation	Enron	Lay 'lied about Enron finances'
7th Mar 2006	Fraud Investigation	Enron	Enron bosses hid massive losses
1st Mar 2006	Fraud Investigation	Enron	Enron 'pretty fast and loose with its rules'
27th Feb 2006	Fraud Investigation	Enron	Enron money man 'raided reserves'
13th May 2005	Fraud Investigation	Enron	Former Enron executive sentenced
9th Jan 2005	Fraud Investigation	Enron	Enron bosses agree $168m payout
3rd Nov 2004	Fraud Investigation	Enron	Convictions in Enron fraud trial
28th Jun 2004	Other Issue	Enron	Enron ex-boss breaks his silence

Related Reports from the Utilities Industry
Company	Issue	Report
Severn Trent Water	Other Issue	Severn Trent Water to repay customers
National Grid	Other Issue	Threat of $20m fine for Blackouts
Southern Water	Questionable Practice	UK Southern Water fined 40million
National Grid	Other Issue	£41m meters fine for National Grid
Thames Water	Other Issue	Ofwat to fine Thames Water £12m