Despite findings by the Enron board of directors’ special investigative committee that top company officials used the controversial off-the-book partnerships for self-enrichment gains, the director who headed up the three-month investigation of the collapsed energy trader refused to say Tuesday that the activities of Enron executives rose to the level of criminal securities fraud.

“My only hesitation is that fraud requires [proof of] a certain state of mind” of the alleged perpetrators, said William C. Powers, chairman of the investigative committee, Enron director and dean of the University of Texas School of Law, during a hearing before the House Energy and Commerce Committee’s oversight and investigations subcommittee Tuesday.

But, he said, Enron top-level management participated in a “systematic and pervasive attempt” to misrepresent the financial condition of the company through a web of “extremely complex” partnership transactions, which he noted were created by using the company’s own assets and credits, and whose chief purpose was to enrich the executives.

Powers put a big share of the blame for Enron’s fall on ex-CFO Andrew Fastow, who has been dubbed “Fast Andy” by some. “If Mr. Fastow had been doing his job correctly,” Powers said, there is a “substantial” chance that Enron’s financial train wreck would never have happened. Fastow seems to be the “Betty Crocker of cooked books,” quipped subcommittee Chairman James Greenwood (R-PA).

“What we found was appalling,” Powers told the House subcommittee. Fastow, who already was paid a “substantial salary,” walked away with $30 million from his investments in the questionable partnerships, while former Enron officer Michael Kopper pocketed $10 million, according to the Enron committee. Fastow is expected to invoke his Fifth Amendment right against self-incrimination when he comes before the full House committee on Thursday.

In response to intense questioning by House lawmakers, Powers painted a picture where most, if not all, of Enron’s top management were at least aware of the existence of the controversial partnerships, and some had actually signed off on the partnerships whose losses eventually led to the financial downfall of Enron. He further portrayed Enron as a company that was way out of control.

“How can anyone look at [this], and conclude that the FBI doesn’t need to be over there with…handcuffs?” asked House Energy and Commerce Committee Chairman W.J. “Billy” Tauzin (R-LA).

Given Enron’s tendency to name its partnerships after “Star Wars” characters, Powers was asked whether former Enron Chairman Kenneth Lay portrayed himself as Luke Skywalker or the villainous Darth Vader during the investigative committee’s interview with him. “Well, he’s not…Luke Skywalker,” Powers said, adding that Lay “certainly [was] responsible for what happened” to the company he oversaw for nearly 16 years.

But Lay “certainly did not indicate” that he saw himself as Darth Vader, either. “I think he had felt he had not been watching [closely] enough,” Powers noted, adding that Lay felt “he had been betrayed” by his management ranks, some of which he mentored.

Rep. Robert Rush (D-IL) said he couldn’t accept that Lay was the “naive and absent-minded professional,” or that Enron’s board were the “unwitting victims” of Fastow and other senior management officials. At the end of the day, investigators will find that these were “well educated, well seasoned” business executives who knew exactly what they were doing, he noted.

Lay formed the investigative committee to look into the questionable partnerships last fall. The news of the partnerships forced Enron to restate its earnings by more than $500 million and reduce shareholder equity by $1.2 billion, which then triggered the free-fall in the company’s stock and ended with Enron in bankruptcy court. Thousands of Enron employees are out of jobs, and the stock portfolios of employees and investors have been drained of billions of dollars.

Powers and the committee conducted a series of interviews with the central figures in the unfolding scandal over a three-month period, and released a report on their findings last weekend. Powers offered the House subcommittee a detailed assessment of each figure, including:

“Much more needs to be done” to get to the bottom of the Enron financial debacle, Powers told the House subcommittee, adding that his committee’s report was just a starting point. The committee did not have subpoena power, he said, and could only skim the surface in many areas.

The subcommittee asked Powers to turn over his committee’s tape-recorded interviews and notes. He said that while he wanted to comply with the request, the items were the property of Enron.

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