Wakeham faces Enron questions

Lord Wakeham has flown to New York to meet lawyers

Former cabinet minister Lord Wakeham has arrived in the US to defend his role in the collapse of energy giant Enron.

The peer was a non-executive director at Enron, and he has travelled to New York to meet lawyers acting for himself and other non-executive directors at the firm.

On Thursday the Washington Post reported it had seen documents showing that Enron's board of directors received detailed briefings about controversial partnership deals which hid the true size of the company's debts.

Enron's multi-billion-dollar bankruptcy was the biggest corporate collapse in US history and is now the focus of several investigations, including a criminal one.

Minutes leaked

The documents acquired by the Washington Post showed that Enron's board of directors received briefings as far back as 1997 about the purpose and structure of the partnership deals.

The Post also says board members approved "aggressive accounting actions, including moving debt off the company books."

The minutes covered four board meetings in 1997 and 1999, and three meetings of the board's finance committee in 2000.

The use of partnerships allowed Enron to keep huge losses of its balance sheets, and when this was discovered last year the company quickly collapsed.

But a lawyer representing Enron, Robert Bennett, says while the board knew of the partnerships it was kept in the dark about the details of how they were run.

"While the board of directors.. were aware that these special partnership entities were being set up... there is a great deal of information regarding their operation and execution that was unknown to the board of directors," Mr Bennett told the paper.

Questions

There are more than a dozen investigations under way in Washington into Enron's downfall.

It is likely investigators will want to talk to Lord Wakeham about his role as a member of the company's audit committee, which was supposed to protect shareholders interests.

He has not so far been summoned to give evidence at a formal hearing but he says he is actively co-operating with inquiries.

It is possible the peer could face costly legal action from some of the employees and investors who have lost money through the affair.

On Thursday Lord Wakeham stepped down temporarily as chairman of the UK's Press Complaints Commission while questions remain about his involvement with the firm.