Dynegy Inc. Chairman Chuck Watson, who may know as much as anyone about the Enron Corp. fiasco, told a Houston group Thursday that his former rival’s downfall should not become an “indictment” of energy trading. In a speech to the Houston Forum, Watson laid the blame for Enron’s troubles on the company’s dubious accounting practices and nothing else.

“It had nothing to do with energy,” he said. Dynegy had announced it would acquire Enron in a controversial merger that now will be decided in courts after Dynegy pulled out three weeks after the announcement (see Daily GPI, Dec. 4, 2001). Watson said Dynegy had nothing to do with Enron’s problems. He called the downfall a “self-inflicted implosion.” Joint ventures and non-energy commodities were the culprits, he maintains, and Enron wanted to grow beyond the limits of its balance sheet.

Watson also predicted that most of the investigations of Enron will conclude that there actually was nothing wrong with the way Enron conducted its core businesses, but they should have been done it more openly. He also predicted that in the long run, the bankruptcy will have little effect on Houston or the energy industry, noting that both came back strong following the 1980s energy collapse.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.