US House committees expand Enron investigation

By the OGJ Online Staff

HOUSTON, Dec. 11 -- Congressional committees examining Enron Corp.'s downfall expanded their investigation Tuesday, calling on the Houston energy company to release documents relating to off-balance sheet entities and risk management policies.

House Energy and Commerce Committee Chairman Billy Tauzin (R-LA) and Oversight and Investigations Subcommittee Chairman James Greenwood (R-PA) also called on the Securities Exchange Commission to turn over reviews and records of Enron's accounting practices and filings since 1997 by Dec. 17.

Tauzin in a letter to SEC Chairman Harvey Pitt said the committee is "profoundly disturbed" by the events surrounding Enron's collapse, especially the loss of retirement savings by Enron employees. In addition, Tauzin said the implosion of the largest US gas and power trader illustrated the lack of transparency in Enron's derivatives position in the energy market.

Among the things the committee wants to know is how Enron and other companies can include in current earnings unrealized gains on derivatives portfolios and what guidance accounting rules provide for the valuation of energy derivatives in a portfolio.

The committee is also looking into accounting guidelines that allow companies to avoid consolidating special purpose entities onto the sponsoring firm's balance sheet. Enron's stock began its free fall after the company disclosed it was reducing shareholder equity by $1.2 billion in the third quarter, resulting from losses at unconsolidated partnerships and other special purpose entities.

In a letter to Enron Chairman Ken Lay, the committee asked for records relating to these special purpose entities, including LJM Cayman LP, LJM2 Co-Investment LP, Joint Energy Development Investments LP or JEDI, Chewco Investments LP, the Raptor entities, Osprey, and Big Doe.

The letter also makes its plain the committee is examining relationships between these entities and Enron employees for any evidence of improprieties. Members also apparently want to examine why the proposed take over of Enron by Dynegy Inc. fell through. It has asked Enron to supply all draft versions of Enron's third quarter earnings report given Dynegy during October and November.

The committee also asked to interview Lay, former chief financial officer Andrew Fastow, other current and former senior Enron employees, as well as members of Enron's audit and compliance committee, including Wendy Gramm, wife of US Sen. Phil Gramm (R-Tex.).

The committee asked the company to make its directors and senior management available by Dec. 21. Last week, committee investigators were in Houston interviewing Enron's current CFO, Jeffrey McMahon.

Related Articles

DOE approves LNG exports to non-FTA countries from Oregon project

03/24/2014 The US Department of Energy conditionally approved Jordan Cove Energy Project LP’s application to export LNG through its proposed terminal on Orego...

Watching Government: Alaska's ANWR reminder

03/24/2014 Alaska's state government apparently doesn't want people to forget there's still significant oil and gas potential beneath the Arctic National Wild...

Begich objects to House Democrats' NPR-A comment extension request

03/24/2014 US Sen. Mark Begich (D-Alas.) let three US House Democrats know he did not approve of their request for the US Bureau of Land Management to add 30 ...

EPA lifts post-Macondo contract suspension in agreement with BP

03/24/2014 The US Environmental Protection Agency and BP PLC reached an agreement that will effectively end the bar on new federal contracts imposed on the mu...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected