Senators Fault Firm that Advised Enron

WASHINGTON -- A consulting firm that advised Enron on complex schemes used to pay its executives lavishly was criticized by senators Tuesday for helping the energy company push legal boundaries and confound the Internal Revenue Service, The Associated Press reported Tuesday.

“How come you didn't see it?'' Sen. John Breaux, D-La., demanded of Charles Essick, a principal of Enron compensation consultant Towers Perrin, who testified at Tuesday's hearing. “You had your head in the sand.''

Essick responded that while his firm had the impression that Enron sometimes pushed the envelope, “We saw nothing in the work that we did that caused us to have a question about impropriety.''

Although many of Enron's manipulations of the tax laws are used by other big corporations, a Bush administration official said Enron's deception was an aberration and major changes in the laws aren't warranted.

Assistant Treasury Secretary Pamela Olson told the hearing by the Senate Finance Committee that the dizzying complexity of now-bankrupt Enron's tax-sheltering transactions “made it very difficult for the IRS to find them and then understand what the company was attempting.'' However, she said, the abuses committed by Enron are “unlikely to recur in the future.”

-- NYSSCPA.org News Staff

Posted on 04/9/03