Skip to main content /LAW /LAW

find law dictionary
CNN Access

Ex-Enron exec: Shredding went on after probe began

(CNN) -- Former Enron executive Maureen Castaneda says document shredding at the energy trading giant began October 31 when the Securities and Exchange Commission announced a formal investigation into Enron's finances and continued until at least mid-January.

Castaneda, who was laid off this month as Enron's director of foreign exchange and sovereign risk, spoke Tuesday with CNN's Jack Cafferty.

CAFFERTY: How did you discover that they were shredding documents as recently as last week? Did you see them doing this?

CASTANEDA: Well, I brought a box home with me so I could [use] it as packing material.


CASTANEDA: Because we're going to be moving soon and [finding] new accommodations.

CAFFERTY: And those pieces of paper in that box indicated that the shredding was going on as recently as last week? What dates are on the papers?

CASTANEDA: The dates are, you know, dates from December. Off balance sheets such as [off-the-book partnerships] Jedi and Chewco.

CAFFERTY: Did you recognize those names? Those were the names of some of these off-the-balance-sheet partnerships that were alleged to have been used to hide some of the losses that were being sustained.

CASTANEDA: That's right.

CAFFERTY: Did you know what you were looking at when you saw them?

CASTANEDA: I am familiar with those names. I'm familiar with the fact that they were off-the-balance-sheet deals.

CAFFERTY: Was this common knowledge within the company that they were doing this stuff away from public scrutiny -- these partnerships and things that were going on?

CASTANEDA: What I was told when they were doing it was that they were selling off the Enron international assets to investors. I was not aware that they were just hiding debt. I was not aware of that at the time. I became aware of it later.

CAFFERTY: What's your reaction to finding out the apparent depth to which this scandal may reach? I mean -- every day there is another revelation. You worked at this company and probably showed up in good faith every day, figuring you know -- go in to do a day's work, get a day's a pay and that's the great American way.

CASTANEDA: Well, it's heartbreaking because the [senior citizens] who put their money -- who believed in Enron, who -- the pensioners who lost their money. That's the heartbreak of it. I have another 25, 30 years I can work. I can save money; they can't. That's not fair.

CAFFERTY: Tell me about this e-mail that was circulated among employees, cautioning against doing any kind of destruction of documents. It was dated way back in October. What was that about?

CASTANEDA: I didn't notice that e-mail frankly. I noticed the one the day I left, which was Monday a week ago, and that one said, you know, our policy is not to destroy documents, given the threatening legal suits.

CAFFERTY: Now the ...

CASTANEDA: And that's what made me realize that I had more than just shreds.

CAFFERTY: What did you do as soon as that light went on, and it dawned on you what you had there?

CASTANEDA: I didn't do anything. I brought the box home; I brought the documents home. I was speaking with my attorney, Paul Howes, and he's from [the San Diego, California, law firm of ] Milberg, Weiss. I was speaking with him, and he was asking about the international deals, and what had gone on, and I told him that I had this box.

CAFFERTY: And now that box of documents is slated, I think, for a courtroom [Tuesday], right? It's going to be introduced as part of evidence in a lawsuit that's being brought on behalf of the Enron shareholders, is that right?

CASTANEDA: That's correct.

CAFFERTY: Give me your sense of the apparent arrogance with which the upper management of this company seems to have conducted its affairs, and I'm speaking only as somebody who reads the papers every day and sits here and does these stories, but it's mind-boggling in a way.

CASTANEDA: Well, you know, there was a lot of arrogance in the company. However, [Enron Chairman and Chief Executive] Ken Lay was not arrogant. He was a nice guy, but there was a lot of arrogance at the company. I mean, to the point where -- an arrogance at the level where you think you can lie to Wall Street and get away with it. You can't get more arrogant than that.

CAFFERTY: And these congressional inquiries and the Justice Department starting its investigation and the SEC beginning an investigation, and yet these things -- apparently the destruction of documents went on long after it was common knowledge all these things were going on, right?

CASTANEDA: That's correct.




Back to the top