dictionary

New memo uncovered in Enron probe

WASHINGTON (CNN) -- The House Energy and Commerce Committee uncovered another memo Wednesday from Enron whistleblower Sherron Watkins detailing her concerns about the company's problems -- this one describing a phone call in which she shared her worries with a partner at Arthur Andersen.

The latest memo -- dated August 20 -- indicated she called a senior official at Andersen, who was also a friend of hers, and talked about her concerns.

Watkins later wrote a seven-page memo to Enron Chairman and CEO Kenneth Lay that said she was worried that "... we will implode in a wave of accounting scandals." (Full story)

Andersen, the energy giant's accounting firm, is also under scrutiny in probes on the fall of Enron, which declared bankruptcy in December.

After speaking to Watkins, the senior official convened a meeting with three Andersen partners, including David Duncan, the Anderson partner overseeing the Enron audit, a source told CNN. Duncan has since been fired.

The accounting firm said Duncan, a former lead partner in the firm's Houston office, instructed others to destroy Enron documents, but a spokesman for Duncan said he acted on the advice of an in-house Andersen lawyer.

VIDEO/AUDIO   •  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 9.5MB (PDF)   •  CNN/Money Special Report: Your 401(k)   •  Timeline: Shredding through history  RESOURCES   •  In-Depth: The end of Enron?   •  TIME.com: Inside the scandal VIDEO White House press secretary Ari Fleischer has heated exchanges with members of the press corps over Enron questions (January 16) Play video (QuickTime, Real or Windows Media)   EXTRA INFORMATION 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      LEGAL RESOURCES Latest Legal News Law Library FindLaw Consumer Center Select a topic Bankruptcy Discrimination Divorce Estate Planning Landlord-Tenant Personal Injury Taxes

Duncan was quizzed Wednesday by eight investigators for the House Energy and Commerce Committee -- one of several committees and subcommittees probing the collapse of Enron. The meeting was not public. (Full story)

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."

• 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)