An Enron Corp employee warned the company's chairman in August of accounting problems and a "veil of secrecy" around certain partnerships that later contributed to the collapse of the world's largest energy trader, congressional investigators said on Monday.
"I am incredibly nervous that we will implode in a wave of accounting scandals," the employee wrote, according to House Energy and Commerce Committee Chairman Billy Tauzin and James Greenwood, head of the investigations subcommittee.
In a sign of internal anxiety at Enron months before it filed the largest bankruptcy in US history, the female employee of Enron's global finance unit wrote to Enron Chairman Kenneth Lay of several concerns, said Tauzin and Greenwood.
The committee found the letter by combing through thousands of Enron documents as part of one of six congressional probes of Enron's collapse. The Justice Department has launched a criminal probe of the company and the Securities and Exchange Commission (SEC) and Labor Department are also investigating.
The employee questioned the ownership stake of former Enron chief financial officer Andrew Fastow in one of several off-balance-sheet partnerships Enron executives set up to help support the company's highly leveraged capital structure. The employee also said he questioned the accounting for the partnerships.
"Is there a way our accounting gurus can unwind these deals now?" the employee asked Lay, according to Tauzin and Greenwood.
Enron, once ranked No. 7 on the Fortune 500 list of large corporations, slid in just weeks from Wall Street stardom to bankruptcy court on Dec. 2, throwing thousands out of work and stirring controversy from Washington to Wall Street.
While the powerful Senate Banking Committee set a Feb. 12 hearing on Enron, the ranking Democrat on the House Energy and Commerce Committee said on Monday there was "pretty strong evidence" of insider trading and false accounting at Enron.
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