These two sentences
from today's New York Times
provide the telling summary of Enron's seemingly damning internal review
Lawyers not involved in any [Enron-related] lawsuits said the report appeared to support an argument that Enron's directors did not recklessly or willfully participate in fraud. That is the conclusion the board, which appointed the investigators, might want a bankruptcy court to reach in deciding whether to leave the company under its control instead of naming a special trustee ...
This other article
in the Times
, by Kurt Eichenwald, paints a slightly different picture of the report, describing it as an effective road map to a number of indictments. But the key point here is not how
damning the report is, but who
it was damning of. The report squarely places the blame on key executives, not the board, even though such a distinction may be difficult to sustain given what we now know of the board's close involvement
with Enron's inner-workings.
Also worth noting is the membership of Enron's investigating committee. Two of the members, William Powers Jr. and Raymond S. Troubh are new members of the Enron Board. They signed on after the current crisis was already underway. But the third, Herbert S. Winokur Jr., has been on the Board since at least 1986.
I'm wondering if Winokur's utility was as something on the order of an expert witness. So, for instance, when the authors of the report said that the board had "failed . . . in its oversight duties," perhaps Winokur was able to detail all the screw-ups he and fellow board members had been responsible for? It sounds like he could be really helpful with that.
I'm unclear on this. But maybe some TPM reader who's down with corporate management practices could help me out with this one?