Andersen's Bass Warned of Problems with Enron in 1999

Documents released by the House Energy and Commerce Committee demonstrate that Andersen partner Carl Bass expressed concern and disagreement with accounting methods at Enron long before Enron's whistle-blower Sherron Watkins sent her memo warning that Enron "could implode in a wave of accounting scandals" in August 2001.

Mr. Bass's memos and e-mail messages, which were made public this week, date back to 1999, when the Andersen partner participated in a dialog with a superior in Andersen's Chicago headquarters regarding the Enron situation.

Some of Mr. Bass's memoranda include objections and concerns about Enron's special purpose entities known collectively as the Raptors which were used to keep hundreds of millions of dollars in debt off of Enron's financial statements. "I will honestly admit that I have a jaded view of these transactions" involving the Raptors, wrote Mr. Bass.

After making repeated and strenuous objections to various accounting practices of Enron, Mr. Bass was removed from the Enron engagement at Enron's request. The "client sees need to replace Carl," read one internal memo.

Mr. Bass is cooperating with federal authorities in their investigation of crimes committed by Andersen and Enron executives.

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