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Accountant: Enron avoided sale to hide losses

Enron Corp. tried to dodge accounting rules by dropping a plan to sell assets in a failed water business, a former Arthur Andersen LLP accountant said Monday.

John R. Sult, who oversaw the books on Enron's Azurix water venture for Andersen, told jurors the energy-trading company could avoid a writedown of hundreds of millions of dollars by promoting, instead, a $1-billion growth strategy for the unit.

"By merely standing up and making the assertion that the strategy exists somehow makes the problem go away," he testified, explaining his view of Enron's plan.

Enron founder Kenneth Lay is accused of improperly avoiding writedowns and former chief executive officer Jeffrey Skilling is accused of misusing reserves. The two men are in the eighth week of their federal fraud and conspiracy trial.

Another former Andersen accountant, Thomas Bauer, corroborated earlier testimony from former senior Enron accountant Wesley Colwell that the energy company wrongly dipped into reserves to pad earnings. Bauer said he and Colwell now work at a Houston consulting firm, but that on advice from his lawyer, he hasn't discussed trial-related issues with Colwell.

Bauer, who oversaw the books of Enron's profitable trading operation, said companies can establish reserves for costs related to assets or liabilities - such as lawsuits - but cannot set aside income in good times to pad earnings in bad.

Allegations against Skilling include that he signed letters to outside auditors vouching for Enron's financial statements, which were allegedly misleading. Lay is accused, too, of lying to outside auditors in October 2001 when he said Enron planned to invest in Wessex Water Ltd., Azurix's cornerstone asset, allowing Enron to avoid a writedown of $700-million or more.

Lay told analysts in a late October 2001 conference call - weeks before the company sought bankruptcy protection - that Andersen had examined the issue and determined no writedown was necessary.

Online search engine leader Google Inc. is devoting a section of its Web site to information about the stock market and corporate America, filling a gaping product hole as it continues to battle for Internet traffic with rivals Yahoo Inc., MSN and America Online.

The Mountain View, Calif., company planned to unveil its newest channel today at http://finance.google.com

Many of the Google features, including stock market quotes and charts, mirror Yahoo's finance section, which has been available for the past decade.

Yahoo operates the Web's most visited finance site with 31.4-million unique visitors worldwide, according to comScore Media Metrix.

Dell Inc. plans to double the number of its employees in India to 20,000 in three years, chairman Michael Dell said Monday, in what appeared to be moves by the world's largest personal computer maker to beef up its presence in one of the world's fastest growing markets.

Although most of the new hiring will be made at the company's call centers, there will also be substantial recruitment at its product testing center and a possible manufacturing plant.

Delta Air Lines Inc., which is operating under bankruptcy protection, asked a judge Monday to allow the nation's third-largest carrier to void roughly 93-million stock options held by 70,000 current and former employees and directors.

The Atlanta-based company said the options, if exercised, would provide little to no real value, making the $305,000 a year it costs the airline to maintain, account for and administer the benefit an unnecessary burden.

The company's motion says the request has the support of the creditors committee in its bankruptcy case and the Air Line Pilots Association, the union that represents holders of roughly one-third of the options Delta is seeking to reject.

A hearing on the request is scheduled April 3 in U.S. Bankruptcy Court in New York.

[Last modified March 21, 2006, 02:30:40]