Fastow defended actions
Report: Ex-Enron finance chief, in memo, supports role in outside partnerships.
February 20, 2002: 7:43 a.m. ET
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NEW YORK (CNN/Money) - Former Enron Corp. Chief Financial Officer Andrew Fastow defended his role in controversial outside partnerships, according to an internal memo that has surfaced, according to a published report Wednesday.
In the Aug. 30 memo prepared after an interview by law firm Vinson & Elkins, Fastow said the outside partnerships were good for the company, and blamed criticism about them on a rival's efforts to get his job at the now bankrupt energy trader, the Wall Street Journal reported.
Federal investigators are looking into allegations that Enron used the partnerships to hide massive debt and shortfalls. In the memo, Fastow stressed that the transactions between his LJM partnerships and Enron were proper and had been approved by top management, the board, and outside auditors and attorneys.
The memo is the first evidence of Fastow's thinking just as pressure was mounting over the accounting issues that led to the Houston energy trader's bankruptcy. Fastow has declined all interviews since the problems first surfaced in October, and has declined to testify before Congress.
Gordon Andrew, a Fastow spokesman, said his attorneys are reviewing the documents released Tuesday and "have no comment at this time," the Journal reported.
The memo says Fastow "expressed some irritation" at the internal probe "because all transactions were reviewed with the Office of the Chairman." It remains unclear how much review occurred, since then-chairman Kenneth Lay has said he wasn't fully informed about the partnership transactions.
Other Enron officers were also interviewed last August and September following a complaint to Lay by Sherron Watkins, a vice president of corporate development who reported to Fastow. Fastow said he believed that Watkins was acting with "a person who wants his job," an apparent reference to former treasurer and current president Jeffrey McMahon, the paper reported.
A House Energy and Commerce subcommittee released the memos, e-mails and other documents this week following hearings into the matter last week. The documents show that the partnerships worried many Enron officials last August. 
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