-Caveat Lector-
From
1 - http://www.observer.co.uk/business/story/0,6903,636104,00.html
2 - http://nydailynews.com/today/News_and_Views/Beyond_the_City/a-
138720.asp
>>>Now: the leaderships demand that there be all kinds of controls on
the average citizen (guns, drugs, et cetera) while their cronies go
about the "business of business", causing how much havoc and damage
to the average citizen employees and stockholders and walk away,
unscathed? A<>E<>R <<<
1}}}>Begin
Enron's new $5bn black hole
Investigators extend probe to key firm at heart of energy giant's
3,000 subsidiaries
The Bush files - Observer special
Jamie Doward, deputy business editor
Sunday January 20, 2002
The Observer
Investigators probing the accounts of collapsed energy giant Enron
are examining what happened to more than $5 billion in loans and
investments the company made to subsidiaries kept off its balance
sheet. The scale of the black hole opening up looks as if it could
dwarf previous estimates.
Investigators are already examining a series of unde clared
transactions between the US company and two Cayman Islands firms -
LJM1 and LJM2 - set up by the firm's former chief financial officer,
Andrew Fastow.
Now it has emerged that by 31 December 2000 Enron had also invested,
or loaned, $5.3bn to a number of companies in which it had stakes,
according to papers filed with the US Securities and Exchange
Commission. These included two ailing firms that had been harming
their par ent's financial performance, water specialist Azurix and
the Dabhol Power Company of India. The subsidiaries - part of a
network of more than 3,000 firms linked to Enron - were claimed by
the company to be 'unconsolidated affiliates', which do not have to
be shown on balance sheets.
Fastow's activities have already forced Enron to restate its accounts
so that they show a $1.2bn reduction in shareholders' equity. And a
special committee Enron established has concluded that further black
holes may be found.
Now investigators are believed to be turning their attention to one
key 'unconsolidated' subsidiary, WhiteWing Associates, which itself
has 75 subsidiaries.
WhiteWing crops up throughout Enron's SEC filings. In 2000 and 1999,
respectively, Enron sold '$632 million and $192m of investments and
other assets to WhiteWing', the papers say. Enron refuses to discuss
WhiteWing, which in turn was involved in several transactions with
LJM1 and LJM2.
WhiteWing lists an investment vehicle, Osprey Trust, as a limited
partner. The trust is owned by a number of anonymous financial
institutions - which suggests the investigators will have to cast
their net far wider to understand the true complexities behind
Enron's downfall.
Guardian Unlimited © Guardian Newspapers Limited 2002
End<{{{
}}}>Begin
Taxpayers May Get Bill
Tab from Enron meltdown
could exceed $1B
By TIMOTHY J. BURGER
Daily News Washington Bureau
WASHINGTON
merican taxpayers are potentially on the hook for more than $1 billion tied up in a
dozen Enron Corp. energy projects around the world, according to government documents.
The projects span the globe from Argentina to the Philippines and include an electric
plant in India that has drawn Vice President Cheney into the budding scandal.
An unidentified investigator for the House Energy and Commerce Committee enters Enron
headquarters in Houston yesterday.
"Combined maximum exposure to projects sponsored by Enron is $1.059 billion,"
officials of the Overseas Private Investment Corp. reported in an internal Dec. 10
memo analyzing the potential consequences of Enron's Dec. 2
bankruptcy.
OPIC backs U.S. companies with projects in foreign countries where financing and
government instability would otherwise make them too risky.
White House spokesman Ari Fleischer cited $640 million in "taxpayer exposure" as a key
reason why Cheney interceded in the foundering Enron project in Dabhol, India.
June Meeting Defended
Fleischer was questioned after the Daily News reported yesterday that Cheney raised
Enron's problem in Dabhol with Indian opposition leader Sonia Gandhi in a June 27
meeting.
An effort quarterbacked by President Bush's National Security Council included
pressure on India by the State and Treasury departments.
Fleischer said the efforts were to protect potential taxpayer liability — not to do a
favor for a company whose executives have been Bush's biggest political contributors.
Dabhol is "an important project to create jobs in America, and there's also a taxpayer
exposure," Fleischer said.
Nevertheless, Fleischer shrugged off a Nov. 8 National Security Council memo that
warned Bush "can not talk about Dabhol" during his meeting with India's Prime Minister
Atal Bihari Vajpayee on Nov. 9.
Bush Kept His Distance
Fleischer indicated there was no ethical reason Bush was barred, and said, "The vice
president had raised it earlier, and the determination was made that this would be one
of the issues that did not rise at the President'
s level."
He added that the White House counsel "did recommend to Larry Lindsey that he have no
direct involvement in the Dabhol plant as a result of his previous holdings with
Enron."
Lindsey, Bush's economic adviser, was a $50,000-a-year consultant to Enron.
OPIC spokesman Larry Spinelli insisted Enron's bankruptcy has no effect on OPIC's
Enron projects because of the way it structures its deals.
But the OPIC memo says of Dabhol that Enron's bankruptcy "further complicates this
already very complex matter," and indicated that OPIC was scrambling to take stock of
potential Enron liability in the aftermath of the ba
nkruptcy.
"We are a U.S. government agency and we are backed by the full faith and credit of the
United States," Spinelli said.
Spinelli acknowledged that "taking the worst-case scenario," taxpayers could foot the
bill if Enron-related deals fall through abroad.
About 63% of Americans think the White House is either hiding something or lying about
its ties with the company, according to a CBS News poll released yesterday.
Just under half of those polled also thought the oil industry has too much influence
in the administration.
The poll of 1,030 adults was taken Tuesday through Thursday. It had a margin of error
of plus or minus 3 percentage points.
Meanwhile, Sen. Hillary Clinton (D-N.Y.) joined the swelling ranks of members of
Congress ditching political donations by Enron and its employees.
Clinton will be handing over to a charity about $6,800 she received from 11 employees
of Enron and its former accounting firm, Arthur Andersen.
Original Publication Date: 1/19/02
Company Items Hit a Gusher on eBay (1/19/02)
Former Exec Quits Texas Utility Post (1/19/02)
End<{{{
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