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Enron Mail |
New Enron Chief Likes Challenges; Cooper Known as Blunt, Creative Strategis= t The Washington Post, 01/30/2002 Accounting for Enron: Enron Selects Cooper of Zolfo Cooper For Post of Acti= ng CEO, Succeeding Lay The Wall Street Journal, 01/30/2002 ENRON'S MANY STRANDS: THE TURNAROUND EFFORT Enron Names an Interim Chief to Oversee Its Bankruptcy The New York Times, 01/30/2002 Video: Angry employee demanded to know if Lay on crack Reuters, 01/30/2002 ENRON'S MANY STRANDS: THE TV INTERVIEW Did NBC Let Lay's Wife Get Around Hard Issues? The New York Times, 01/30/2002 Ill. Regulators Vote To Remove Enron Energy-Sale Rights Dow Jones Energy Service, 01/30/2002 House Panel Seen Asking Enron Board Members To Testify Dow Jones Energy Service, 01/30/2002 Enron failed to disclose full lobbying expenses=20 Associated Press, 01/30/2002 ENRON'S MANY STRANDS: THE DOCUMENTS Enron Says Shredding of Records Was Not Stopped Until Recently The New York Times, 01/30/2002 Prosecutors, FBI Pore Over Enron's Books; Responsibility for Company's Demi= se Is Shrouded by Mystery Partners, Offshore Entities The Washington Post, 01/30/2002 Enron Puts Stock in Turnaround Specialist RELATED STORY More scrutiny: Regu= lators are probing whether Enron inflated California power prices. A12 Los Angeles Times, 01/30/2002 ENRON'S MANY STRANDS: THE ACCOUNTING Fuzzy Rules Of Accounting And Enron The New York Times, 01/30/2002 Andersen's Reputation in Shreds. The accounting firm was once considered th= e industry's conscience. But the Enron scandal has revealed the dark side o= f the profession. Los Angeles Times, 01/30/2002 Accounting for Enron: U.S. Probes Enron's Effect on Power Prices The Wall Street Journal, 01/30/2002 U.S. to Probe Enron Tie to Energy Prices; Senators From West Voice Concern = About Alleged Manipulation The Washington Post, 01/30/2002 Accounting for Enron: Davis Polk Is Barred From Enron Work For J.P. Morgan = Chase The Wall Street Journal, 01/30/2002 Burden of Doubt: Stocks Take a Beating As Accounting Worries Spread Beyond = Enron --- Investors Ignore Good News About Economy; Banks Are a Focus of Se= lling --- `A Big Haircut' for Some The Wall Street Journal, 01/30/2002 At Energy Firm, A Post-Enron Double-Check The Washington Post, 01/30/2002 Ex-Enron workers feel jilted by Bush=20 Houston Chronicle, 01/30/2002 Sempra buys metals business from Enron Associated Press Newswires, 01/30/2002 DENMARK: Enron Wind "too risky" for German rival Nordex. Reuters English News Service, 01/30/2002 . . . And the Enron Pundits The Washington Post, 01/30/2002 Greedy Liars? The Enron Scandal; TheBIGStory An Occasional Look at Stories = Everyone Is Talking About The Washington Post, 01/30/2002 Open Cheney's Enron Baggage to Scrutiny Los Angeles Times, 01/30/2002 Attorney general's opinion is sought Media has asked to see suicide note=20 Houston Chronicle, 01/30/2002 ENRON'S MANY STRANDS: AN EXECUTIVE'S DEATH Hometown Remembers Man Who Wore Success Quietly The New York Times, 01/30/2002 ___________________________________________________________________________= ____________ Financial New Enron Chief Likes Challenges; Cooper Known as Blunt, Creative Strategis= t Albert B. Crenshaw Washington Post Staff Writer 01/30/2002 The Washington Post FINAL E01 Copyright 2002, The Washington Post Co. All Rights Reserved Corporate turnaround expert Stephen F. Cooper likes to rate restructuring j= obs on a scale of 1 to 10, with 10 being the most difficult.=20 "I would rather work on a 10 than a 4," he told the Toronto Globe and Mail = two years ago as he took over at Burlington, Ont.-based Laidlaw Inc. -- par= ent of the Greyhound bus line -- shortly before it entered bankruptcy. Now he may have has his "10" -- at bankrupt Enron Corp., where Cooper was n= amed interim chief executive yesterday. He replaces company founder Kenneth= L. Lay, who resigned last week under pressure from creditors.=20 Cooper said his group will start immediately.=20 "Our focus is on the future of Enron," he said in a statement released by E= nron. "With more than 19,000 employees worldwide, Enron has real businesses= with real value. We will work closely with the board of directors, managem= ent and the creditors committee to develop a reorganization plan to maximiz= e value for the company's stakeholders."=20 Whether Enron will survive in any form is highly uncertain, however. The co= mpany has at least $40 billion in debt, with the full extent of its liabili= ties from hundreds of partnerships and related companies as yet unknown. In= addition, most of its known assets are heavily mortgaged, and some of its = viable operations have already been sold off.=20 Enron's cornerstone energy-trading operation was sold earlier this month to= UBS Warburg, a Swiss bank, and Enron announced yesterday that its presiden= t and chief operating officer, Lawrence G. Whalley, had resigned to go with= UBS Warburg. Earlier, Enron ceded control of its largest pipeline to its H= ouston-based rival, Dynegy Inc. And yesterday, Enron agreed to sell its Lon= don-based metals-trading unit for $145 million to Sempra Energy.=20 It is possible all of Enron's remaining assets will also have to be sold to= pay creditors, and some experts said Cooper's main challenge may be hammer= ing out an agreement among creditors on how to divide up the proceeds.=20 As managing principal of Zolfo Cooper LLC, a New York and Los Angeles-based= firm specializing in the reorganization of corporations in bankruptcy or o= ther difficult circumstances, Cooper has worked with such troubled companie= s as Macy's parent Federated Department Stores Inc., appliance maker Sunbea= m Corp. and construction firm Morrison Knudsen.=20 The firm "has terrific cachet in the workout community," said Stephen H. Ca= se of the Washington office of Dave, Polk & Wardwell. "They are very much i= n demand and highly respected."=20 Cooper is known as blunt-spoken, pulling no punches about what a company ou= ght to do to survive, and creative in coming up with strategies to achieve = those goals.=20 And as an executive who tries to rescue companies in extremis, he has won s= ome and lost some.=20 One of his biggest victories was at Federated, which filed for Chapter 11 p= rotection in 1990 and emerged two years later. Federated owns Bloomingdale'= s and other department-store chains as well as Macy's.=20 Federated, once owned by Canadian developer Robert Campeau, was a basically= solid business that was overwhelmed by junk-bond debt from the 1980s takeo= ver binge. Cooper was able to cobble together a large retail firm from the = wreckage and have it in the black by late 1992.=20 At the other end of the scale, Bradlees, a chain of discount department sto= res operating in the Northeast, turned out not to be viable and was liquida= ted, with unsecured creditors receiving 22 cents on the dollar.=20 Cooper is a graduate of Occidental College and holds an MBA from the Wharto= n School of the University of Pennsylvania. He was not available for commen= t yesterday. http://www.washingtonpost.com=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Accounting for Enron: Enron Selects Cooper of Zolfo Cooper For Post of Acti= ng CEO, Succeeding Lay By Rebecca Smith Staff Reporter of The Wall Street Journal 01/30/2002 The Wall Street Journal A4 (Copyright © 2002, Dow Jones & Company, Inc.) Enron Corp. said it named Stephen Cooper, a principal at New York restructu= ring firm Zolfo Cooper, as acting chief executive officer, succeeding Kenne= th Lay, who resigned from the embattled energy concern last week.=20 In his new role, Mr. Cooper, 55 years old, faces the daunting challenge of = shepherding Enron through the biggest bankruptcy case in U.S. history. The = appointment had been expected. Enron still employs some 19,000 people, alth= ough the company has been mired in Chapter 11 bankruptcy-court proceedings = since last month, which shields it from creditors as it attempts to reorgan= ize. Meantime, Enron's board is continuing to search for a chairman, a position = also held by Mr. Lay. Those close to the matter say that Enron is seeking s= omeone with a high public stature. The idea is for this person to be someth= ing of an ambassador to Congress, which now has nearly a dozen committees i= nvestigating Enron's business practices.=20 Mr. Cooper, who declined an interview request yesterday, is expected to run= Enron on a day-to-day basis and help it navigate the bankruptcy process. I= t is expected that he will leave the post if the company emerges from bankr= uptcy proceedings. Previously, Enron noted, he has worked on the bankruptcy= proceedings of Laidlaw Inc., Morrison Knudsen Corp., Sunbeam Corp., Federa= ted Department Stores Inc., as well as many other big-name Chapter 11 cases= .=20 Those who know Mr. Cooper describe him as an energetic deal maker who is go= od at getting to the crux of issues. In a room filled with suit-and-tie-cla= d bankruptcy attorneys, Mr. Cooper often stands out for his casual dress. W= hen discussions get contentious, he is known to defuse the tension with hum= or then redirects discussions back in the direction of solutions.=20 "He's a very interesting person, and I can't say that about a lot of the pe= ople you deal with when you're in bankruptcy," said Peter Widdrington, chai= rman of Laidlaw, the big Toronto-based transportation company that operates= school buses in the U.S. and Canada and owns Greyhound bus lines. Laidlaw = filed for bankruptcy protection last summer, and Mr. Cooper has been advisi= ng it on how to emerge from court proceedings.=20 Mr. Widdrington said Mr. Cooper has indicated that he will continue to work= 20 hours a week for Laidlaw, as specified in his contract. "I'm not unconc= erned about the fact he's now working with Enron," said Mr. Widdrington, bu= t he added that others at Mr. Cooper's firm are capable of "stepping in."= =20 Some observers wonder whether Mr. Cooper will, for all his talents, be able= to lead Enron out of bankruptcy; they speculate that the company could wel= l be liquidated in the end. In all, Enron's bankrupt entities have liabilit= ies exceeding $30 billion.=20 Mr. Cooper will work most closely with Jeff McMahon, Enron's chief financia= l officer, who yesterday was named president and chief operating officer, a= nd with Ray Bowen, formerly treasurer, who will step into Mr. McMahon's fin= ance job.=20 Greg Whalley, named president of Enron last summer by Mr. Lay, has resigned= to take a senior level job at UBS AG's UBS Warburg, which this month bough= t Enron's energy-trading business.=20 Separately, Texas Deputy Attorney General Jeff Boyd filed a motion in the U= .S. Bankruptcy Court of the Southern District of New York -- where Enron's = case is being heard -- asking the court to appoint an additional creditors = committee to represent the interests of former and retired Enron employees.= =20 "While the major financial creditors of Enron have a right to adequate repr= esentation in the bankruptcy case, so do the thousands of former and retire= d Enron employees who are the least able, on an individual basis, to partic= ipate meaningfully in this case," Mr. Boyd said in a statement.=20 Meanwhile, Sempra Energy Trading, a unit of San Diego-based Sempra Energy, = said it will pay $145 million for Enron's London-based metals trading busin= ess, formerly Metallgesellschaft Ltd. The transaction, subject to final aud= it, is expected to be completed by Feb. 4. Don Felsinger, head of Sempra's = unregulated operations, said the Enron unit has been profitable "since its = inception . . . and we expect this track record of success to continue."=20 ---=20 Joann S. Lublin contributed to this article. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business/Financial Desk; Section C ENRON'S MANY STRANDS: THE TURNAROUND EFFORT Enron Names an Interim Chief to Oversee Its Bankruptcy By SHAILA K. DEWAN With JENNIFER 8. LEE 01/30/2002 The New York Times Page 7, Column 1 c. 2002 New York Times Company HOUSTON, Jan. 29 -- Enron today named Stephen F. Cooper, a specialist in re= vamping troubled companies, to lead it through the largest bankruptcy in th= e nation's history.=20 Mr. Cooper, who will serve as Enron's interim chief executive, fills the to= p position vacated by Kenneth L. Lay, who resigned last Wednesday as chief = executive and chairman under pressure from the company's creditors. Enron is still searching for a chairman, who will serve as the political fa= ce of the company in Washington, where it is being investigated by Congress= , the Securities and Exchange Commission and the Department of Justice.=20 Mr. Cooper, 55, has been involved in prominent bankruptcies, including thos= e of Federated Department Stores and Trans World Airlines. But sorting out = Enron's tangled and opaque finances will be the biggest challenge of his ca= reer, bankruptcy experts said.=20 Enron also named Jeffrey McMahon president and chief operating officer. He = succeeds Lawrence G. Whalley, who resigned to take a position with UBS Warb= urg, which bought the energy trading business that was once the centerpiece= of Enron's success.=20 Mr. McMahon, who was named in a letter by a former employee, Sherron S. Wat= kins, as one executive who complained about the company's conflicts of inte= rest, became chief financial officer after the forced resignation in Octobe= r of Andrew S. Fastow, who managed some of the partnerships that helped bri= ng the company to ruin. Raymond M. Bowen Jr., formerly the treasurer, was a= ppointed executive vice president and chief financial officer.=20 Mr. Cooper, a managing partner at Zolfo Cooper, a boutique advisory firm fo= r companies in trouble, was the leading candidate to replace Mr. Lay. In se= lecting candidates for the Enron board to interview, the creditors committe= e decided to focus on specialists in corporate turnarounds, rather than chi= ef executives with marquee names.=20 ''Our focus is on the future of Enron,'' Mr. Cooper said in a statement. ''= Enron has real businesses with real value. We will work closely with the bo= ard of directors, management and the creditors committee to develop a reorg= anization plan to maximize value for the company's stakeholders.''=20 Mr. Cooper is known for his ability to balance the interests of warring fac= tions.=20 ''He's a person who can get in there and see where the bodies are buried an= d see what things are needed to calm the waters,'' said Sandra E. Mayerson,= a bankruptcy lawyer at Holland & Knight who represents several of Enron's = smaller creditors.=20 Still, some creditors not represented on the committee reacted with only a = cautious optimism, praising the naming of an outsider to run the company bu= t noting that the terms of Mr. Cooper's contract, which calls for him to be= paid an hourly wage with a bonus if he meets certain goals, have not yet b= een made public.=20 ''We're going to keep an open mind as to Mr. Cooper and his team,'' said Da= vid Bennett, a lawyer who represents a group of oil and gas companies owed = about $100 million. ''To have someone with restructuring experience is a go= od thing.''=20 While a few creditors have asked for a court-appointed trustee to oversee t= he reorganization, some said that the choice of an outsider might satisfy t= hem. ''He's going to bring credibility to the situation,'' Ms. Mayerson sai= d. ''I think if you hadn't gotten him involved in management, there would h= ave been movement for an examiner or a trustee. He can serve that function = as well as the C.E.O. function. So you are getting two functions for the pr= ice of one.''=20 A lawyer for the Wiser Oil Company, another creditor that has asked for a t= rustee, declined to comment.=20 Some bankruptcy experts have questioned Mr. Cooper's lack of experience as = a chief executive. But Mr. Cooper's defenders point out that what is needed= in Enron's case is someone intimately familiar with bankruptcy, not someon= e who can lead or innovate in the context of a healthy company.=20 ''He's a person who knows the ins and outs of restructuring and a person wh= o knows the ins and outs of forensic accounting,'' said Deborah Hicks Midan= ek, a principal for Glass & Associates, a Zolfo competitor.=20 Mr. Cooper began work today, sending Enron employees a voice mail message p= raising the work force and expressing confidence that the company would eve= ntually emerge from bankruptcy in some form. But many outside experts maint= ain that Enron may have little choice but to sell its viable businesses and= eventually shut down.=20 Mr. Cooper has largely avoided the spotlight, even as he has advised or man= aged well-known companies in crisis.=20 He grew up in Indiana and received his M.B.A. from the Wharton School in 19= 70. At the accounting firm of Touche Ross, now a part of Deloitte & Touche,= he and Frank Zolfo, now retired, founded the reorganization advisory group= and were early advocates for bankruptcy as an area of specialty.=20 In the early 1990's, Mr. Cooper served as an adviser to Federated, the owne= r of Bloomingdale's and Macy's, as it worked through its bankruptcy. In par= t because of the aggressive timelines Mr. Cooper set, the Federated bankrup= tcy proceeding took only two years instead of the five years that some anal= ysts had predicted.=20 He also served as an adviser in two of T.W.A.'s bankruptcies.=20 Even as he takes the Enron job, Mr. Cooper continues to serve as vice chair= man and chief restructuring officer of the Canadian conglomerate Laidlaw In= c., the largest North American ground transportation company, whose holding= s include Greyhound Lines. Though he was called in to help the debt-burdene= d company stave off bankruptcy in 2000, Laidlaw filed for protection from c= reditors in June 2001.=20 ''When we did eventually file for bankruptcy, we did it in a very orderly b= asis, and that had a lot to do with his efforts,'' said Peter Widdrington, = the chairman of Laidlaw. Mr. Cooper cleared a major obstacle by negotiating= a recent $55.4 million settlement, announced two weeks ago, in a class- ac= tion lawsuit against Laidlaw.=20 On a scale of one to 10, Mr. Cooper told a Canadian newspaper, he rated Lai= dlaw a 4 for complexity. ''I would rather work on a 10 than a 4,'' he said.= =20 Enron, then, is his wish come true.=20 Stephen F. Cooper=20 BORN: Oct. 23, 1946, Gary, Ind.=20 EDUCATION: B.S. in economics, Occidental College, 1968; M.B.A., Wharton Sch= ool of Business, 1970.=20 CAREER HIGHLIGHTS: 1970-1985 -- Helped found reorganziation advisory group = at Touche Ross & Co., which later became part of Deloitte & Touche. 1985 --= Joined advisory firm Zolfo, which was renamed Zolfo Cooper. 1990-1992 -- A= dvised Federated Department Stores on reorganization. 1995-1996 -- Adviser = to Morrison Knudsen during its reorganization. 2000-current -- Vice chairma= n and chief restructuring officer of Laidlaw, an Ontario-based conglomerate= . The company filed for bankruptcy protection in June 2001. 2001-current --= Advised Washington Group International, a company formed when Morrison Knu= dsen acquired Raytheon Engineers and Constructors, on reorganization.=20 FAMILY: Nancie, wife, with two daughters.=20 HOBBIES: Golf, tennis, skiing, biking, gardening. Photos: Enron has appointed Stephen F. Cooper, left, as interim chief execu= tive, Jeffrey McMahon as president and chief operating officer, and Raymond= M. Bowen Jr., right, as chief financial officer.=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Video: Angry employee demanded to know if Lay on crack=20 Reuters News Services=20 Jan. 30, 2002, 8:26AM WASHINGTON - A video of an Enron staff meeting, held as the former energy g= iant began to unravel, showed former chief Kenneth Lay under fire from empl= oyees, one of whom demanded to know if he was on crack.=20 "I would like to know if you are on crack. If so that would explain a lot, = if not you may want to start because it's going to be a long time before we= trust you again," was one written comment Lay read out at the meeting, hel= d Oct. 23.=20 "I think that's probably not a very happy employee, and that's understandab= le," Lay said in response.=20 Enron, once the world's largest energy trader and a Wall Street darling, ma= de the largest bankruptcy filing in U.S. history on Dec. 2. Damning allegat= ions of insider trading and financial misdeeds evaporated investor confiden= ce, threw thousands out of work and wiped out workers' retirement savings.= =20 The staff meeting, aired today on NBC's Today show, happened just days afte= r Enron reported its first quarterly loss in over four years after taking c= harges of $1 billion on poorly performing businesses.=20 In the video, Lay, who last week quit as Enron's chairman and chief executi= ve officer, apologized to his workers and promised to get back money they l= ost when the company's share price plummeted.=20 "Let me say right up front, I am absolutely heartbroken about what's happen= ed both over the last few months and more importantly the last several days= ," he told glum-faced employees.=20 "Many of you, who were a lot wealthier six to nine months ago, are now conc= erned about college education for your kids, maybe the mortgage on your hou= se, maybe your retirement and for that I am incredibly sorry. But we're goi= ng to get it back."=20 Earlier this week Lay's wife Linda said her family lost its fortune when En= ron, the once-proud linchpin of the Houston economy and national energy mar= ket, collapsed.=20 "There's nothing left. Everything we had mostly was in the one stock... Oth= er than the home we live in, everything else is for sale.. We are fighting = for liquidity," she said.=20 But NBC said they had found at least 10 homes or lots, owned by the couple,= that were not listed for sale and were worth about $10 million.=20 The network said Lay was entitled to a severance package of $25 million. An= d as of Jan. 1, the former-Enron chief owned more than $5 million in two co= mpanies -- with 340,724 shares in the No. 2 Houston computer-maker Compaq a= nd 20,220 in drugmaker Eli Lilly.=20 USA: Video shows Enron employee asked if Lay was on crack. 01/30/2002 Reuters English News Service (C) Reuters Limited 2002. WASHINGTON, Jan 30 (Reuters) - A video broadcast on Wednesday of an Enron s= taff meeting, held as the former energy giant began to unravel, showed its = former chief Kenneth Lay under fire from employees, one of whom demanded to= know if he was on crack.=20 "I would like to know if you are on crack. If so that would explain a lot, = if not you may want to start because it's going to be a long time before we= trust you again," was one written comment Lay read out at the meeting, hel= d on Oct. 23. "I think that's probably not a very happy employee and that's understandabl= e," Lay said in response.=20 Enron, once the world's largest energy trader and a Wall Street darling, ma= de the largest bankruptcy filing in U.S. history on Dec. 2. Damning allegat= ions of insider trading and financial misdeeds evaporated investor confiden= ce, threw thousands out of work and wiped out workers' retirement savings.= =20 The staff meeting, aired on Wednesday on NBC's "Today" show, happened just = days after Enron reported its first quarterly loss in over four years after= taking charges of $1 billion on poorly performing businesses.=20 In the video Lay, who last week quit as Enron's chairman and chief executiv= e officer, apologized to his workers and promised to get back money they lo= st when the company's share price plummeted.=20 "Let me say right up front, I am absolutely heartbroken about what's happen= ed both over the last few months and more importantly the last several days= ," he told glum-faced employees.=20 "Many of you, who were a lot wealthier six to nine months ago, are now conc= erned about college education for your kids, maybe the mortgage on your hou= se, maybe your retirement and for that I am incredibly sorry. But we're goi= ng to get it back."=20 Earlier this week Lay's wife Linda said her family lost its fortune when En= ron, the once-proud linchpin of the Houston economy and national energy mar= ket, collapsed.=20 "There's nothing left. Everything we had mostly was in the one stock... Oth= er than the home we live in, everything else is for sale.. We are fighting = for liquidity," she said.=20 But NBC said they had found at least 10 homes or lots, owned by the couple,= that were not listed for sale and were worth about $10 million.=20 The network said Lay was entitled to a severance package of $25 million. An= d as of Jan. 1, the former-Enron chief owned more than $5 million in two co= mpanies - with 340,724 shares in the No. 2 personal computer company Compaq= and 20,220 in drugmaker Eli Lilly. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business/Financial Desk; Section C ENRON'S MANY STRANDS: THE TV INTERVIEW Did NBC Let Lay's Wife Get Around Hard Issues? By FELICITY BARRINGER 01/30/2002 The New York Times Page 7, Column 6 c. 2002 New York Times Company Lisa Myers, the NBC Capitol Hill correspondent long known as tough-minded, = left much of her aggressive edge at the door on Saturday when she did an ex= clusive interview with the wife of Kenneth L. Lay, the former chief executi= ve of Enron.=20 As a result, Linda Lay felt comfortable enough to say that she and her husb= and, who took home about $200 million worth of cash and stock the last four= years, ''are fighting for liquidity.'' ''We don't want to go bankrupt,'' she added. ''Other than the home we live = in, everything else is for sale.''=20 So should Ms. Myers earn praise from her colleagues for eliciting such a ne= wsworthy -- and, to former Enron employees, infuriating -- statement? Or di= d she shirk her duty by failing to grill Mrs. Lay on the details of where a= ll the money went, accepting the answer: ''There's nothing left. Everything= we had mostly was in Enron stock.''=20 For 10 minutes on Monday on the NBC News program ''Today'' and for another = 6 minutes yesterday, Mrs. Lay, the couple's children, Mr. Lay's former wife= and his pastor were given a platform to praise the integrity of the man wh= o Ms. Myers said in a separate report ''led Enron to great heights and to r= uin.''=20 Ms. Myers, while challenging Mrs. Lay in general terms on issues like Mr. L= ay's responsibility for Enron's collapse, gave the Lay family plenty of roo= m to make the case for him, free of prosecutory inquiry.=20 This led some journalists and media critics to ask whether the network and = one of its sharp-edged correspondents had become soft.=20 Ken Auletta, who covers media companies for The New Yorker, said: ''Lisa My= ers has proven over the years that she knows how to ask tough questions and= be in-your-face aggressive. With this she proved she has another pitch, to= draw people out.''=20 He added: ''That's commendable. But there's another pitch, a combination of= solicitous and tough questions. We didn't see that third pitch'' in the in= terview, he said.=20 But Richard Wald, a former ABC News executive who is now a professor at the= Columbia University Graduate School of Journalism, said aggression was oft= en counterproductive. ''What you wanted was a sense of what this woman was = like,'' Mr. Wald said. ''I had the feeling she shot herself in the foot.''= =20 One core question raised by critics was how much leeway an interviewer shou= ld give when the only person who can be enticed before the camera's eye is = a surrogate -- a wife, a friend, a child -- for the newsmaker the journalis= t really wants to interview. ''She's not a main character in the drama,'' M= r. Wald said, ''she's a peripheral character now putting herself forward.''= =20 Don Hewitt, executive producer of the CBS News program ''60 Minutes,'' had = not seen the interview, but said: ''When you invite somebody in and you mak= e it apparent that you want to discuss the business at hand, there are no g= round rules. If she knows that much about what he made and what they lost a= nd what they don't have, she's qualified to answer all the rest of the ques= tions.''=20 Ms. Myers said: ''I dealt with her on the broad strokes of every significan= t issue of potential misconduct that had been raised about her husband. But= you cannot go into all the minutiae.''=20 A second question, Ms. Myers and Mr. Wald say, is the extent to which relen= tless critical scrutiny can and should be balanced with sympathetic coverag= e.=20 In another report this month, Ms. Myers captured the tone and substance of = much of her Enron coverage. In it, she described an optimistic Mr. Lay sayi= ng in October that ''we had a good strong quarter.'' Ms. Myers followed by = saying: ''Six weeks later, Enron laid off 4,000 employees and declared bank= ruptcy, costing thousands of workers their life savings. Tonight, Enron had= no comment on why it didn't level with the public last fall.''=20 Ms. Myers said yesterday that she and the network should be judged by ''the= totality of the coverage.''=20 Last night, a Myers report on the defense of Mr. Lay's family included crit= ical commentary by business experts. Another NBC reporter, Jim Avila, also = reported on the Lay's $10 million in real estate holdings and $5 million in= stock and interviewed an Enron employee who was incredulous about Mrs. Lay= 's claim that her family was nearly broke.=20 As for the amount of time given to the defense of Mr. Lay, she said, ''We w= anted to let the family make all the points they wanted to make -- they hav= e a right to be heard from -- the amount of time they've gotten for their p= oint of view has been dwarfed by the hours and hours of critical coverage.'= ' Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Ill. Regulators Vote To Remove Enron Energy-Sale Rights Of DOW JONES NEWSWIRES 01/30/2002 Dow Jones Energy Service (Copyright © 2002, Dow Jones & Company, Inc.) By Jon Kamp CHICAGO (Dow Jones)--The Illinois Commerce Commission approved an order Tue= sday to strip an Enron Corp. (ENRNQ) unit of its right to sell electricity = to retail customers in the state.=20 Illinois law requires retail electric providers such as Enron Energy Servic= es to be backed by a company with at least an investment-grade credit ratin= g. Major ratings firms dropped Enron to below that level last November, and= while EES has maintained hundreds of customers around the U.S. despite joi= ning its parent in bankruptcy court, it is missing needed criteria to opera= te in Illinois, the ICC said.=20 "As a result of Enron's ratings downgrades, EES can no longer rely on the E= nron guarantee to demonstrate that it is in compliance" with state law, the= ICC said in its order.=20 Enron's certificate won't be immediately revoked. Instead, Tuesday's order = starts a process in which an administrative law judge will review the issue= , and will give Enron an undermined amount of time to show why it should re= tain its certificate, ICC spokesman Beth Bosch said.=20 The commission said in its order that EES was notified Nov. 30 that it had = 30 days to demonstrate it had financial resources to meet the state's crite= ria. But EES hasn't provided any documentation since then, the order said.= =20 An EES representative didn't return repeated calls seeking comment.=20 ICC Commissioner Ruth Kretschmer said EES has already informally suggested = it will voluntarily give up its right to serve retail customers in Illinois= .=20 "My understanding is that they have offered to relinquish the certificate,"= Kretschmer said in an interview.=20 But Kretschmer still expects there will be a review process to determine ex= actly how Tuesday's order impacts EES' ability to do business in Illinois. = While the company had dozens of Chicago-area customers before its parent's = collapse, including the city of Chicago and PepsiCo Inc. (PEP) unit Quaker = Oats Co., the ICC said EES wasn't actually supplying electricity for any of= its Illinois customers.=20 Instead, EES was acting as a billing agent and manager, helping mostly larg= e commercial and industrial customers manage their energy use and restructu= re deals with local utilities, such as Exelon Corp.'s (EXC) Commonwealth Ed= ison Co. Kretschmer said it is unclear whether EES needs the retail electri= city provider to serve in such a capacity.=20 "We probably won't have an answer until we go through the (review) process,= " Kretschmer said.=20 While EES may not have directly served customers with power, some energy ma= nagement deals were a foothold to later energy provider service. In its eig= ht-year contract signed with the city of Chicago last summer, for example, = Enron was to provide management services for the first few years and then a= ctual electricity for the remainder of the deal.=20 The city of Chicago canceled its Enron deal in early December. Quaker Oats,= the University of Chicago and the Archdiocese of Chicago have also backed = out of their EES contracts in the wake of Enron's financial troubles.=20 EES was a large player in Illinois' young, deregulated retail electric mark= etplace, but Kretschmer said she doesn't see its withdrawal hindering the g= rowth of competition.=20 "There are a number of other big players that can pick up what Enron lost,"= she said. "I don't think it will have a negative impact here."=20 -By Jon Kamp, Dow Jones Newswires; 312-750-4129; jon.kamp@dowjones.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 House Panel Seen Asking Enron Board Members To Testify By Jason Leopold 01/30/2002 Dow Jones Energy Service (Copyright © 2002, Dow Jones & Company, Inc.) Of DOW JONES NEWSWIRES=20 (This article was originally published Tuesday.) LOS ANGELES (Dow Jones)--Members of Enron Corp.'s (ENRNQ) board of director= s are expected to be asked next week to testify before the House Energy and= Commerce Committee, a lawyer representing the board said Tuesday.=20 The board members will appear before the committee whether or not they are = subpoenaed and will answer all questions, attorney Neil Eggleston said.=20 "I expect something will happen in the next day or so regarding their appea= rance," Eggleston said. "We were notified already, but we should know for s= ure by next week."=20 Peter Sheffield, a spokesman for the committee, said Tuesday that he expect= s committee Chairman Billy Tauzin, R-La., to issue subpoenas next week to c= ompel members of Enron's board to testify, possibly by mid-February.=20 Enron's former Chairman and Chief Executive Ken Lay, who resigned last week= but remains on the board, is scheduled to testify before the House committ= ee on Monday. Enron's board is named in a number of civil and class action = lawsuits associated with the company's collapse. Its audit committee review= ed some of the off-balance sheet partnerships now at the center of federal investigations, and the full board voted twice to suspend Enron's code of e= thics to allow former Chief Financial Officer Andrew Fastow to run partners= hips even as he served as an officer for Enron. Eggleston said last week Enron's board of directors didn't learn until Octo= ber that an Enron executive had serious concerns accounting improprieties c= ould bring down the company, although word of those concerns had spread thr= oughout the company by early September.=20 The executive, Sherron Watkins, raised her concerns with Lay in August. Tho= se concerns were shared with the board after being reviewed at Lay's reques= t by Vinson & Elkins, Enron's outside law firm, Eggleston said last week.= =20 According to Eggleston, Robert Jaedicke, the chairman of the board's audit = committee, became aware of Watkins' concerns a few days before the committe= e met on Oct. 8. Vinson & Elkins advised others on the committee at the mee= ting, and the rest of the board was informed a couple of days before the fi= rm released its report.=20 The firm submitted its findings in a report dated Oct. 15, concluding that = the company's handling of its off-balance-sheet partnerships was proper but= could be portrayed in a way that could be damaging to Enron.=20 Enron has declined to challenge Eggleston's account.=20 Some members of Enron's board - including audit committee members Ronnie Ch= an, chairman of the Hang Lung Group in Hong Kong; John Wakeham, chairman of= the Press Complaints Commission in the U.K.; and Paulo V. Ferraz Pereira, = executive vice president of Group Bozano in Brazil - reside outside the U.S= .=20 Eggleston said he didn't know if those board members would travel to the U.= S. to testify.=20 -By Jason Leopold, Dow Jones Newswires; 323-658-3874; jason.leopold@dowjone= s.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron failed to disclose full lobbying expenses=20 Associated Press=20 Jan. 30, 2002, 6:53AM WASHINGTON - Enron Corp. apparently failed to disclose many of its lobbying= expenses to Congress last year as the energy trader headed toward financia= l disaster.=20 Enron acknowledged the problem Tuesday night after a private group that tra= cks money in politics compared Enron's lobbying filing to Congress in Augus= t with congressional filings by outside lobbying firms. The lobbying firms = say they were paid more than $1.6 million by Enron for the first six months= of 2001. Enron reported spending $825,000.=20 Enron spokeswoman Karen Denne said the company's spending figure submitted = to Congress last Aug. 15 is meant to cover lobbying by the company's own st= aff and work by outside lobbying firms.=20 "We are reviewing those fees and will respond in writing to the secretary o= f the Senate," Denne said.=20 Among the lobbyists doing work for Enron were Republican strategist Ed Gill= espie; ex-Sen. J. Bennett Johnston, a Louisiana Democratic; and current Rep= ublican Party chief Marc Racicot; and two ex-aides to House Majority Whip T= om DeLay. Racicot still collects a salary from his firm but said when he to= ok the GOP post he would no longer lobby for Enron. In the face of mounting= criticism, Racicot has since given up his other lobbying clients as well.= =20 The discrepancy in Enron's lobbying expenses was discovered by the Washingt= on-based Center for Responsive Politics. Its executive director, Larry Nobl= e, said "it is particularly critical at this time for the public to have th= e full picture of Enron's lobbying activities."=20 Also on Tuesday, Enron's political action committee said it donated at leas= t $26,000 to congressional campaigns in November, the month before the comp= any filed for bankruptcy protection. Recipients included several lawmakers = on the committees now investigating Enron's collapse. At least two, Rep. Ma= ry Bono, R-Calif., and Rep. Greg Walden, R-Ore., plan to give their donatio= ns to charity.=20 The Enron PAC donated at least $120,188 to federal candidates and fund-rais= ing committees last year, the report shows.=20 In another development, the issue of document-shredding re-emerged at Enron= , with the company saying it hired private companies to destroy documents. = Robert Bennett, an attorney representing the company, said the discarded do= cuments were not sensitive financial records, and any suggestion of any imp= ropriety was "a bunch of nonsense."=20 Enron hired two companies, one of them named Shredco, to destroy a huge vol= ume of material, ABC News reported Tuesday night.=20 "There was a contract with a company when Enron consolidated down from two = buildings to one building," Bennett said. "There was a lot of information i= ncluding payroll records, resumes, Social Security numbers. These trucks ca= me in in the light of day."=20 "Even if they're shredding old newspapers, they need to contact the Justice= Department" to get permission to do so and allay suspicions, said Rep. Jim= Greenwood, R-Pa., who chairs the House Energy and Commerce oversight and i= nvestigations subcommittee looking into Enron.=20 FBI agents have been investigating allegations of massive shredding of docu= ments at Enron's Houston headquarters. The company's auditor, Arthur Anders= en LLP, has acknowledged destroying Enron-related documents and e-mails tha= t were sought by federal and congressional investigators.=20 Business/Financial Desk; Section A ENRON'S MANY STRANDS: THE DOCUMENTS Enron Says Shredding of Records Was Not Stopped Until Recently By BARNABY J. FEDER and MICHAEL BRICK 01/30/2002 The New York Times Page 1, Column 1 c. 2002 New York Times Company Enron acknowledged yesterday that it had contracted until mid-January with = commercial shredding companies to destroy company records.=20 The disclosure outraged a congressman whose subcommittee is investigating d= ocument destruction at Enron and its accounting firm, Arthur Andersen, thou= gh Enron insisted that the records being destroyed were unrelated to the co= ntinuing investigations of the company's collapse. F.B.I. agents were in the company's Houston headquarters as recently as Mon= day, government officials said. They have been working there to preserve po= tential evidence since last week, when an employee came forward to say docu= ments were being shredded earlier in the month.=20 In Washington, House Republican leaders backed President Bush and Vice Pres= ident Dick Cheney in their refusal to tell Congress about contacts between = Enron and the administration's energy task force. But several Republican se= nators called on the White House to disclose the information. [Page C1.]=20 Mark Palmer, an Enron spokesman, said the commercial shredding was a routin= e matter. The materials destroyed by a private company, Shredco, included i= tems like payroll runs, old personnel records, performance reviews, medical= records and other items that he called ''sensitive employee documents.''= =20 Representative James Greenwood, the Pennsylvania Republican who is chairman= of the investigative subcommittee of the House Energy and Commerce Committ= ee, said last night that he was dismayed that even routine shredding had co= ntinued for so long at Enron.=20 ''It is stunning to me that this company, which is being investigated by th= e Congress, by the Justice Department, by the S.E.C., would get anywhere ne= ar a shredder without at least seeking the permission of the Justice Depart= ment and others, so that everyone is clear on what it is that they were shr= edding,'' Mr. Greenwood said. ''Otherwise they are either incredibly arroga= nt and out of control, or somebody's incredibly stupid.''=20 As for Andersen, the Energy and Commerce Committee sent the firm a letter d= emanding details of its internal investigation of document shredding, as we= ll as information about any consulting work it did on a score of Enron's co= mplex partnership deals.=20 And computer experts said in interviews that the majority -- perhaps nearly= all -- of the destroyed Andersen and Enron materials could be recovered by= electronic means.=20 Brian Sierra, a Justice Department spokesman, declined yesterday to comment= on whether agents had secured computer hard drives and other electronic me= dia at Enron. Asked if the F.B.I. had succeeded in preventing any further d= estruction of potential evidence at the company, he said, ''We certainly ho= pe so.''=20 Mr. Palmer said that all shredding at Enron had ceased as of Jan. 14, after= the first reports of document destruction at Andersen.=20 ''A lot of things are stacking up that under normal circumstances we would = destroy and employees would want us to destroy,'' he said.=20 Last week, when Maureen Castaneda, a former Enron executive, disclosed that= the company was continuing to shred documents in its accounting department= , the company insisted that it had issued several directives stating that '= 'all relevant documents should be preserved in light of pending litigation.= ''=20 But those directives, issued as e-mail messages beginning on Oct. 25, began= by specifying only certain materials related to investigations that had co= me to light. At the end of October, the company issued a broader message te= lling employees to preserve just about all documents.=20 On Jan. 14, another directive was issued by Enron's general counsel, James = Derrick Jr., to ''remind all employees, that, as earlier instructed, in vie= w of the pending and threatened legal proceedings involving the company, no= company records, either in electronic or paper form, should be destroyed.'= '=20 One Enron employee who insisted on not being identified said that on Friday= the company had gathered up the shredders on each floor of its headquarter= s and put them into sealed-off areas, but that the machines had not been re= moved from the building.=20 At Andersen, the focus was on electronic records. The firm has hired ASR Da= ta Acquisition and Analysis, a small computer forensics firm, to recover co= mputer records that may have been deleted or overwritten.=20 Because nearly all paper documents these days are created on computers, inv= estigators say that recovering the electronic materials is likely to be far= more important to sorting out what happened than gathering and reassemblin= g shredded paper documents.=20 ASR, based in Cedar Park, Tex., declined to describe in any detail its work= for Andersen and for Davis, Polk & Wardwell, the law firm that Andersen ha= s hired to investigate its dealings with Enron.=20 Andrew S. Rosen, president of ASR, said the extent of his inquiry was ''sti= ll emerging.'' He added that while it was generally easy to recover deleted= data, figuring out who deleted it and when -- crucial information for Cong= ressional and criminal investigators -- is much harder.=20 ''This is like an onion,'' Mr. Rosen said. ''The first layers come off easi= ly, but it gets harder and makes you cry as you go deeper.''=20 Andersen itself is anxious to complete the investigation because the firm's= senior management believes that the inquiry will show that potentially ill= egal activities were confined to a handful of individuals. The firm is stru= ggling to retain customers amid growing concerns that its reputation has be= en irreparably damaged.=20 Andersen, based in Chicago, has promised to issue a complete report on its = Enron dealings in a few days. The Energy and Commerce Committee, in its let= ter yesterday, asked Andersen to disclose by tomorrow who was being intervi= ewed as part of the investigation, anyone identified as taking part in the = destruction of records and the details of Andersen's engagement of Davis, P= olk.=20 The continuing pressures come at a crucial time for Andersen as it tries to= head off client defections.=20 The Wall Street Journal reported yesterday that Delta Air Lines would give = other firms the opportunity this spring to bid for the auditing job now per= formed by Andersen. Peggy Estes, a Delta spokeswoman, described the process= as a normal one for the company.=20 Other big Andersen clients, like Utilicorp United of Kansas City, Mo., and = International Paper of Stamford, Conn., said they were conducting similar r= eviews. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 A Section Prosecutors, FBI Pore Over Enron's Books; Responsibility for Company's Demi= se Is Shrouded by Mystery Partners, Offshore Entities Susan Schmidt Washington Post Staff Writer 01/30/2002 The Washington Post FINAL A06 Copyright 2002, The Washington Post Co. All Rights Reserved Enron's ex-chairman Kenneth Lay says he was in the dark; his subordinates s= ay he knew of their deals. The company insists accountants approved its off= -the-books partnerships, but Arthur Andersen says key facts were withheld. = Creditors are demanding payment; the board of directors is eyeing the stagg= ering stock profits made by former executives.=20 The finger-pointing has started in earnest now that more than 60 prosecutor= s and FBI agents swarm over Enron's books, trying to untangle a web of myst= ery partners and offshore entities that swapped and hedged the Houston-base= d company's debt. There is still a vast amount unknown -- and no proof so far of criminal int= ent by Enron officials -- as the Justice Department ramps up its investigat= ion of the energy giant's collapse. At this early stage, legal experts and = lawyers close to the probe say, it may not even be clear who the chief inve= stigative targets should be.=20 Prosecutors are casting about for the right witnesses to guide them through= the complexity, a decision that could prove crucial to their success. They= are likely to offer deals with some people in exchange for information and= testimony. Of central interest is Lay's role at the company, and that of f= ormer executives Andrew Fastow and Jeffrey Skilling, principal architects o= f the hundreds of partnerships.=20 "You have to decide who you want to scapegoat -- who you want to build your= case toward," said Donald Langevoort, a securities law professor Georgetow= n University. The choice goes beyond strictly legal questions, he said, for= it helps establish a public face for the inquiry.=20 "Would you rather this be a Kenneth Lay story or the story of a highly ambi= tious second in command?" Langevoort said. "Who you portray as the bad guy = is a political decision."=20 Prosecutors have focused their early attention on the shredding of Enron re= cords at the Arthur Andersen auditing firm, though it's not clear that will= lead them to the principal figures at Enron. Bringing an obstruction-of-ju= stice case against Andersen may be a relatively quick call, lawyers close t= o the probe said, if it's found that documents were destroyed after officia= ls knew they could be sought in legal proceedings.=20 Investigators have collected numerous Andersen e-mails and memos dealing wi= th the retention or destruction of documents. The lead Andersen auditor on = the Enron account, who was fired by the company for allegedly orchestrating= the shredding, has already spent seven hours with the Justice Department's= Enron task force telling prosecutors about the role he says higher-ups pla= yed in the document destruction.=20 Any underlying fraud and securities cases against Enron and Andersen will b= e much more difficult to sort out. Securities law experts closely tracking = the Enron saga said possible wrongdoing may include insider trading, materi= al misrepresentations to the Securities and Exchange Commission or to the p= ublic in press releases, as well as mail and wire fraud.=20 "Serious questions have been posed, but whether anyone is criminally liable= for anything is not known yet," said Joel Seligman, dean of Washington Uni= versity School of Law. Whether charges are brought, he said, likely rests o= n information not yet pieced together.=20 "Why did people destroy so many documents?" Seligman said. "What was potent= ially so unnerving in those documents for Enron and Arthur Andersen? I'd re= ally like to know the answer to that question."=20 Investigators are poring over reams of company records and trying to recons= truct what was shredded, both at Enron and Arthur Andersen. Help from insid= ers would be vital to speed the investigation along and illuminate what can= 't be readily gleaned from company records.=20 Forty FBI accountants have been dispatched to Houston to examine Enron's bo= oks. But former Enron executives and lawyers close to the case say there is= only so much the paper trail will reveal. Heading the investigation is fra= ud division chief Joshua Hochberg, with coordination of prosecutors across = the country by Leslie Caldwell, former chief of the securities fraud unit i= n the U.S. attorney's office in San Francisco.=20 The most pressing unknown at this point may be who the real players are in = the more than 1,000 Enron-related private partnerships and investment group= s, many of which were kept off the company books. Those entities hid compan= y debt and pumped up the company's stock, which Enron executives cashed out= for hundreds of millions of dollars.=20 It may take an insider to reveal those names, because they are not on compa= ny records. Even Enron's lawyers say they don't have them. Similarly, it ma= y require an inside source to help prosecutors decide if there is a tax eva= sion case to be made from the partnerships located in the Cayman Islands.= =20 The prospect of an obstruction case against Arthur Andersen seems to have s= haken at least one important potential witness loose already. David B. Dunc= an, Andersen's lead auditor on the Enron account, has met with the Justice = Department Enron task force twice. His lawyers said he is cooperating, but = he has not so far entered into any deal with prosecutors.=20 Duncan is in a position to know what went on at both companies and about th= e partnerships themselves. Enron executives came up with the partnership co= ncepts and the accountants "tweaked" the financial setups, said one source = familiar with the accountant's work.=20 The early phase of the investigation may turn on how far up the chain the d= ocument destruction investigation goes at Andersen. Duncan has told congres= sional investigators he believed he was following direction from company la= wyer Nancy Temple.=20 In October, with shareholders filing lawsuits against Enron and the SEC pre= paring an inquiry, Temple sent Duncan's group an e-mail reminding him of th= e Andersen document retention policy. It called for the retention of some d= ocuments and the destruction of others. A week later, Temple e-mailed the p= olicy to two high-level Chicago partners who were reviewing the Enron audit= and the way the partnerships had been reviewed.=20 Yesterday, the House Energy and Commerce Committee demanded information fro= m Andersen about Enron document destruction, which the company has acknowle= dged went beyond the Houston office. Committee investigators also are inter= ested in the role of Andersen's outside lawyers, the New York-based law fir= m of Davis, Polk and Wardwell.=20 The firm was hired Oct. 9. It has declined to comment on what advice it gav= e Andersen and Temple about preserving documents. Temple testified before C= ongress that the firm advised her to send out an e-mail on Nov. 10 -- three= weeks after the SEC began probing Enron -- saying it was time to start pre= serving documents.=20 Davis, Polk and Wardwell is conducting Andersen's internal investigation of= the document destruction, prompting questions among committee staffers abo= ut the objectivity of the investigation. http://www.washingtonpost.com=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business; Business Desk Enron Puts Stock in Turnaround Specialist RELATED STORY More scrutiny: Regu= lators are probing whether Enron inflated California power prices. A12 JEFF LEEDS and LEE ROMNEY TIMES STAFF WRITERS 01/30/2002 Los Angeles Times Home Edition C-1 Copyright 2002 / The Times Mirror Company HOUSTON -- Eight weeks after going broke, Enron Corp. selected management c= onsultant Stephen Cooper as interim chief executive to steer the fallen ene= rgy giant through Bankruptcy Court, a battery of shareholder lawsuits and a= criminal probe.=20 Board members tapped Cooper, a principal of New York-based turnaround firm = Zolfo Cooper, less than a week after the resignation of Chairman and Chief = Executive Kenneth L. Lay. The board has not named a new chairman. Cooper, 55, said Tuesday that "Enron has real businesses with real value." = But whether he can restructure the firm and handle the complex legal issues= to allow it to keep operating remained an open question, analysts said.=20 Enron already has sold a majority stake in its commodities trading business= , which generated about 90% of the $100 billion in revenue it reported for = 2000. The company also has handed control of its largest pipeline to Housto= n-based rival Dynegy Inc., and expects to sell its Portland General Electri= c division for an estimated $3 billion to Northwest Natural Gas Co. Enron's= remaining assets, including smaller pipelines and utilities outside the U.= S., accounted for just a fraction of its revenue.=20 But Cooper, in a voicemail disseminated to Enron's employees, offered an op= timistic take on the company's current divisions.=20 "The physical assets look to me to be of an enormous advantage here," Coope= r said. "The regulated assets--the pipelines and generating plants-- provid= e reliable, steady cash flow and returns. And they provide a very sound, fu= ndamental base to restructure around."=20 Many experts, however, expressed doubt Cooper will be able to do anything m= ore than sell off Enron in pieces.=20 "I find it hard to envision a workable entity coming out of bankruptcy here= ," said Andre Meade, a utilities analyst for Commerzbank Securities. "The o= nly business that really makes sense is a smaller version of what Enron was= in the first place--a small gas-pipeline company, but the demands of the i= ndustry over the last couple of years have basically eliminated all small-p= ipeline companies."=20 Enron is still seeking a chairman, who must deal with the firm's interests = in Washington, where it is under attack on Capitol Hill.=20 Steven Panagos, a partner at Zolfo Cooper, said the firm believes Enron has= enough cash to continue operations and emerge from bankruptcy. ''It has a = good customer base, it has a good supplier base and most importantly it has= plenty of liquidity,'' he said.=20 Cooper's biggest asset, analysts said, is whatever goodwill he can generate= from the creditors' committee. Cooper comes to the company as an outsider-= -an attribute sought by committee members who pushed for Lay's exit.=20 Cooper began studying company reorganizations while working as an accountan= t at Touche Ross, now known as Deloitte & Touche. In 1986, he joined a form= er colleague, Frank Zolfo, to form Zolfo Cooper. Cooper, a graduate of Occi= dental College in Los Angeles and the University of Pennsylvania's Wharton = School, declined interview requests Tuesday.=20 As part of the management shuffling announced Tuesday, Enron President and = Chief Operating Officer Lawrence G. Whalley resigned to take a post at UBS = Warburg, the Swiss bank that acquired Enron's trading division this month. = Enron also elevated Chief Financial Officer Jeff McMahon to succeed Whalley= and named treasurer Ray Bowen as CFO.=20 Shannon Burchett, president of Dallas-based energy firm specialist Risk Lim= ited Corp., noted that the promoted executives have not been implicated in = the scandal, but "if I were a creditor, what I'd like to see is a whole new= cast."=20 When Cooper was hired to help rescue troubled Canadian transportation firm = Laidlaw Inc. in mid-2000, he clearly identified the problem areas, Laidlaw = Chairman Peter Widdrington said.=20 "He can get deadlines established which initially look unrealistic, but the= more he sells the deadline to all involved, the more realistic they become= ," he said.=20 Some analysts noted that Cooper, a veteran of the bankruptcies of Federated= Department Stores and other firms, has little experience in the energy fie= ld.=20 But Widdrington, who has discussed the Enron debacle with Cooper, said, "St= eve himself is not awed by the task. He thinks essentially the operational = aspects of the company are still in decent shape."=20 Cooper plans to continue as Laidlaw's vice chairman and chief restructuring= officer.=20 Cooper's firm also has been consulting for Polaroid Corp. since last summer= and assisted the firm as it prepared to file for Chapter 11 bankruptcy pro= tection in October. Polaroid spokesman Skip Colcord said the company could = not comment on Zolfo Cooper's performance because Polaroid has not yet emer= ged from bankruptcy.=20 UCLA bankruptcy law professor Lynn LoPucki said Enron probably can emerge f= rom Chapter 11, but it probably will do so as a shadow of its former self. = "There will be a lot of pieces of things that survive from Enron, but they = aren't in any real sense Enron," he said. "One might carry the Enron name, = one might be the same legal entity, but they won't be anything like the pre= -bankruptcy Enron."=20 Michael J. Miller, a former Enron employee and a member of the organization= that sued Enron officials Monday for severance and other losses, said he r= emains hopeful that Cooper can squeeze cash flow from Enron's shell.=20 "Certainly we'll wish this guy well on his endeavors, but we're also going = to be watching what's going on," Miller said. "We have very high stakes."= =20 *=20 Leeds reported from Houston and Romney from Los Angeles. PHOTO: Stephen Cooper, 65, has an undergraduate degree from Occidental Coll= ege in Los Angeles.; ; PHOTOGRAPHER: Associated Press=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business/Financial Desk; Section C ENRON'S MANY STRANDS: THE ACCOUNTING Fuzzy Rules Of Accounting And Enron By FLOYD NORRIS and KURT EICHENWALD 01/30/2002 The New York Times Page 1, Column 5 c. 2002 New York Times Company Enron collapsed after reporting strong profits for years, a fact that might= be seen as proof that the profits were illusory.=20 But even some accountants who are extremely critical of Enron's accounting = now say that accounting rules -- including one that was influenced by Enron= when it was being written -- give at least a veneer of acceptability to so= me of the most widely questioned Enron accounting practices. ''It's conceivable that they complied with the rules,'' said Douglas Carmic= hael, a professor of accountancy at Baruch College. ''Absent a smoking-gun = e-mail or something similar, it is an issue of trying to attack the reasona= bleness of the assumptions they made.''=20 The Enron case highlights a weakness in the system that exists to encourage= companies to fairly describe their financial health: when accounting rules= are written very specifically, clever accountants find ways to get around = them. When, as in this case, they are written far more generally, proper ac= counting can be overly reliant on the good faith of companies and auditors = in applying the rules.=20 As a result, the evidence that the Justice Department and the Securities an= d Exchange Commission would need to bring fraud charges would be documents = showing that accountants made estimates they knew to be unreasonable. To fi= nd such evidence, investigators would review internal memorandums and e-mai= l messages. But some of those appear to have been destroyed by employees of= Enron and its former auditor, Arthur Andersen.=20 The rule in question concerned trading in the energy business. When Enron's= energy services division agreed to supply power to a company at a fixed pr= ice, it made optimistic projections that energy prices would fall enough in= the future to guarantee Enron a healthy profit. It was then able to report= that profit as soon as it signed the contract -- long before it was clear = whether its optimistic assumptions would prove to be accurate.=20 ''It looked like a license to print money,'' said Glenn Dickson, a former m= anager in the energy services unit.=20 The decision that energy trading could be accounted for in the way that Enr= on used was made by the Emerging Issues Task Force, a group under the overs= ight of the Financial Accounting Standards Board, the principal accounting = rule maker in this country. It did so in 1999, after meeting with Enron, wh= ich was viewed as the leading company in energy trading.=20 Timothy S. Lucas, the director of research at the F.A.S.B. and the nonvotin= g chairman of the task force, said Enron's role was to provide information,= not to serve as a consultant. He said that, as he recalled, Enron had alre= ady begun using accounting similar to the accounting the task force wound u= p endorsing.=20 In retrospect, Mr. Lucas said, the task force may have erred by not requiri= ng more disclosures about the accounting used, particularly in lon
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