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Former minister 'raised Enron concern'
By Peter Spiegel in Washington
Published: March 20 2002 19:52GMT | Last Updated: March 21 2002 13:32GMT
lord wakeham

The former British government minister embroiled in the Enron affair has said he raised questions about the company's relationship with its auditors at Andersen almost eight years ago but was reassured that it was all above board.

Lord Wakeham, who was an Enron board member, detailed his concerns in discussions between his attorneys and Enron lawyers conducting an internal investigation of the company's collapse.

The summary of those discussions, a copy of which has been passed to the Financial Times, represents Lord Wakeham's first comments on the scandal that brought down the energy giant.

Lord Wakeham, a former accountant, built a reputation under former prime minister Margaret Thatcher as one of the Conservative party's shrewdest political fixers. He became the first high-profile casualty of the Enron scandal outside the US when he was forced to stand down as chairman of the UK's newspaper watchdog, the Press Complaints Commission.

In the interview, conducted in January, lawyer Jeremy Doyle told Enron investigators that Lord Wakeham raised his concerns with Andersen's lead accountant on the Enron audit shortly after he joined the Enron board in 1994 - just months after Enron set up the first of its highly controversial off-balance sheet partnerships.

Transactions involving the partnership, called Jedi, were later used to hide losses from Enron's balance sheet. Public acknowledgement of the losses last October triggered the company's collapse into bankruptcy.

"Wakeham was fascinated that Arthur Andersen was able to finish the audits in a short period of time, especially since the transactions were so complex and there [were] a number of transactions," Lord Wakeham's lawyer told investigators, according to the summary. "The response to his comment was that Andersen had a good working relationship with Enron and Enron co-operated fully with Andersen."

Lord Wakeham, a former energy secretary and cabinet minister under both Lady Thatcher and her successor John Major, served on the Enron board's audit committee and was one of nine board members to be questioned directly or through lawyers as part of the investigation, headed by William Powers, dean of the University of Texas law school.

The summary of the interview with Mr Doyle, Lord Wakeham's attorney, is among the least detailed of the sessions with the board members and did not raise questions as to what Lord Wakeham knew about the structure of the private partnerships.



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