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Report: Enron didn't pay income taxes



(CNN) -- The scandal surrounding Enron grew Thursday, with a report that the bankrupt energy trading company did not pay income taxes in four out of the past five years.

The New York Times reported that Enron used almost 900 subsidiaries in tax-haven countries to avoid paying taxes. While the use of overseas tax havens by U.S. companies is not unusual, the newspaper, citing tax experts, said Enron made use of the technique far more often than other companies. (Full story)

A separate report in the Wall Street Journal said Enron's accounting firm, Arthur Andersen, raised questions about Enron's accounting practices and potential conflicts of interest nearly a year ago. The newspaper reported that Andersen officials discussed dropping Enron as a client, but retained the company. Enron paid Arthur Andersen $52 million in fees in 2000 alone.

The White House Thursday called a report by a Democratic congressman concluding that Enron benefited from at least 17 provisions in the Bush administration's energy plan "one more partisan waste of taxpayers' money." (Full story)

Enron Collapse
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  •  Senate unit faults Enron board
  •  Corporate corruption in America
 MORE STORIES
  •  3 Britons charged in Enron fraud
  •  Bush pushes for tougher corporate rules
  •  Playboy exposes Enron workers
 EXTRA INFORMATION
  •  Document: Powers report
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  •  CNN/Money Special Report: Your 401(k)
  •  Timeline: Shredding through history
 RESOURCES
  •  In-Depth: The end of Enron?
  •  TIME.com: Inside the scandal

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White House press secretary Ari Fleischer has heated exchanges with members of the press corps over Enron questions (January 16)

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Read the exchange of letters (From FindLaw) (PDF)  
December 4 letter from Waxman to Cheney 
January 3 letter from Addington to Waxman 
January 8 letter from Waxman to Cheney 
 
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On Wednesday, the House Energy and Commerce Committee uncovered another memo from Enron whistleblower Sherron Watkins. This one describes a phone call in which she shared her worries with a partner at Arthur Andersen.

After speaking to Watkins, the senior official convened a meeting with three Andersen partners, including David Duncan, who oversaw the Enron audit, a source told CNN. Duncan, who has been fired, was quizzed Wednesday by eight investigators for the House Energy and Commerce Committee -- one of several Congressional committees and subcommittees probing the collapse of Enron. The meeting was not public.

The Enron scandal began when the energy company, with $62.8 billion in assets, filed for Chapter 11 bankruptcy protection December 2. Many Enron employees had invested most of their 401(k) savings in company stock and lost much of their life savings when it went bust.

Latest developments

• The White House refused to say whether it was conducting a formal review to determine if Enron officials contacted more government officials. Press secretary Ari Fleischer, in a somewhat contentious exchange with reporters, said the administration planned to look into contacts between Bush administration officials and Enron executives only if there are any allegations of wrongdoing or in response to specific questions. (Full story)

• The FBI sent out an internal bulletin seeking 38 agents who are also certified public accountants to relocate to Houston to staff the Enron task force, officials told CNN Wednesday.

• According to a report by Rep. Henry Waxman, D-California, who has been critical of the White House for not releasing records related to the closed-door meetings of Vice President Dick Cheney's energy task force, "there are at least 17 policies in the White House energy plan that were advocated by Enron or that benefited Enron." A spokeswoman for Cheney dismissed the Waxman report as "election-year maneuvering." (Full story)

• Sen. Patrick Leahy, the chairman of the Senate Judiciary Committee, warned the Justice Department Wednesday it might have a conflict of interest with Arthur Andersen. In a letter to Deputy Attorney General Lawrence Thompson, Leahy, D-Vermont, noted that the accounting firm has a contract worth more than $700,000 with the Justice Department to complete a review of the FBI as it undergoes a reorganization.

• A former federal regulator said Enron tried to manipulate U.S. energy policy. Curtis Hebert Jr., a former commissioner with the Federal Energy Regulatory Commission in the Clinton administration, said in an interview with CNN: "Everything they espoused to Congress and to state leaders was always what's in the best interests of Enron, never what's in the best interests of American energy companies."(Full story)



 
 
 
 



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