WASHINGTON (voa) – Directors of the board at the bankrupt energy trader Enron told a Senate committee, Tuesday, top executives of the company hid information from them about the firm’s debt and its risky accounting practices.
One director, Herbert Winokur, told senators the board should not be criticized for failing to address problems that were hidden. At the same time, the Senate committee released documents showing Enron’s board, and its President Jeffrey Skilling, knew as early as 1999 that the company might violate accounting principles by creating partnerships to hide debt.
Enron was the world’s biggest energy trader whose stock soared in the late 1990s, but crashed after investors learned the company was concealing billions of dollars in debt and engaging in questionable accounting methods.
The Senate hearing came as a published report indicated the company may be facing more problems. The Wall Street Journal reported Tuesday that Enron manipulated California’s power system, during the state’s energy crisis in 2000, to drive up energy prices and boost profits.
Meanwhile, opening arguments began Tuesday in Houston, in a high-stakes case that could determine the future of the company that was keeping Enron’s books – Arthur Andersen. The company, which has lost clients, partners and employees since the Enron scandal, has been charged with obstruction of justice for destroying documents related to the company’s accounting practices.
In a separate case, Andersen says it has reached a $217 million agreement to settle claims related to the collapse of the Baptist Foundation of Arizona. More than 10,000 mostly elderly investors lost $570 million when the foundation went bankrupt in 1999. Investors accuse Andersen, as the foundation’s auditor, of being negligent.
