Enron's Downfall
Enron's Downfall
The independent committee set up by Enron after its bankruptcy has found that an elaborate scheme, which involved multiple partnerships that hid Enron's debts and allowed it to overstate profits by $1 billion, was the key to the company's collapse. The 217-page report concluding the internal investigation was filed with the New York bankruptcy court. Enron is under investigation by nine congressional committees, the Justice Department, the Securities and Exchange Commission and the Labor Department.
Houston-based Enron, once the seventh largest company in America, collapsed in a cloud of debt and questions about its finances and accounting practices. The Enron internal inquiry that was released said the company inflated its profits by nearly $1 billion and top employees took in millions of dollars through complex partnerships that played a major role in the company's collapse. It has also accused the Andersen firm, which audited Enron's accounts, of knowing about the scheme.
Enron's former chief financial officer Andrew Fastow, who is charged with pocketing $30 million from questionable deals that led to the company's collapse, will not answer questions in testimony before Congress. The former Enron CFO and an aide, Michael Kopper, will invoke their rights under the Fifth Amendment of the Constitution to not incriminate themselves, said Republican Billy Tauzin. The former Enron officers have been subpoenaed to testify before a subcommittee of the House Energy and
Commerce Committee. Four other executives are said to have taken sums varying from several hundred thousand dollars to $ 1 million.
More than 4,000 workers have lost their jobs, and thousands more have lost their retirement savings in company stock, which has become all but worthless. Enron rank-and-file employees were prevented from selling their fast depreciating stock holdings, while top executives got rid of them before the shares...
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