Enron Corp. - University of California | Office of The President

accommodated Enron's desire for one partnership, Chewco, to be formed quickly,
completing the necessary legal documentation in 48 hours.
* * *
The firm shared in the failure to disclose the extent to which Enron Chief
Financial Officer Andrew Fastow was benefitting from his ownership in the
partnerships doing business with Enron.
The firm agreed to investigate the allegations that Watkins raised, even
though she said the firm had an inherent conflict of interest. The Powers report,
which was released Feb. 1, said that by limiting the scope of the Vinson & Elkins
probe, Enron predetermined the outcome: No further investigation was merited.
* * *
Moreover, in one memo to Lay, Watkins said that on Oct. 16 she told Joe
Dilg, Vinson & Elkins's managing partner, that Enron ought to "come clean and
admit problems." She said the company should restate its 2000 financial earnings
to incorporate the ledgers of the partnerships known as Raptors.
Watkins said Dilg replied, "Are you suggesting that Ken Lay should ignore
the advice of his counsel and auditors concerning this matter?"
The Fort Worth Star Telegram, 2/24/02.
Aftershocks from the collapse of Enron Corp. have rocked the energy giant's
auditors, bankers – and now its attorneys. Houston law firm Vinson & Elkins was
the latest to be hit when news broke that it had shrugged off allegations of
accounting fraud by whistle-blower Sherron S. Watkins. That's an incendiary
revelation, for certain....
... Most experts agree that V&E's seemingly dismissive attitude about the
Watkins allegations – months after the transactions she complained about took place
– probably does not meet the standard for either criminal or civil liability. But that
verdict might be different if it turns out that the firm's attorneys also helped Enron
devise some of the complex deals that wound up sinking the company in the first
place.
There are growing indications that may just be the case. In her missive to
Enron chairman and CEO Kenneth L. Lay, Watkins suggested that the law firm wrote
so-called opinion letters vouching for the legality of some of the deals now under
scrutiny. And according to two ex-Enron executives contacted by BusinessWeek,
Vinson & Elkins played a creative role in structuring and managing some of the
company's controversial "special purpose" partnerships. One former executive
in the company's Houston office says employees would approach Vinson & Elkins
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