Enron Letter Questions Winokur’s Role

Two members of the House of Representatives raised concerns Friday over the dual role of Harvard Corporation member Herbert S. “Pug” Winokur Jr. ’64-’65—who is both an Enron investigator and Enron board member.

Two members of the House Energy and Commerce Committee—Rep. John D. Dingell (D-Mich.) and Rep. Peter Deutsch (D-Fla.), who is the ranking member of the Subcommittee on Oversight and Investigations—said Winokur may “hinder” Congressional investigations into Enron’s demise.

The letter, addressed to William C. Powers, who is head of Enron’s special committee, details Winokur’s possible involvement in approving Enron affiliates which contributed to the company’s downfall.

These affiliates, such as LJM investments, were set up to help hide Enron’s high costs.

The letter then points to Winokur’s role as chair of the board of directors for Azurix Corp., a failed water company set up by Enron.

According to the letter, Enron bought 22,500 shares of Azurix stock from Winokur for $184,275—twice the market value.

Yet Winokur is on an Enron committee in charge of all internal investigations at the company, including dealings with the Securities and Exchange Commission (SEC).

“Mr. Winokur is essentially investigating his own actions and approving or disapproving the resulting report,” Dingell and Deutsch wrote.

“You can understand why disinterested observers might conclude that the report’s independence, or at least the appearance of independence, has been compromised,” their letter said.

On the heels of the letter, the Enron special committee on which Winokur sits released its 217-page report on Enron.

The report blames most of Enron’s collapse on “self-enrichment by employees, inadequately designed controls, poor implementation, inattentive oversight, simple (and not so simple) accounting mistakes, and overreaching in a culture that appears to have encouraged pushing the limits.”

The report is highly critical of Enron, faulting its three leading executives—Andrew Fastow, Jeffrey Skilling and Kenneth Lay—for having “withheld from the board important information about” the company’s potentially fraudulent deals.

A spokesperson for Dingell declined to comment to The Crimson until Powers testifies before the Senate subcommittee today.


Last Thursday, HarvardWatch—a monitoring group revived last year by members of the Progressive Student Labor Movement (PSLM)—released a report calling for the University to investigate its investments in Enron.

The report focuses on Highfields, a hedge fund that manages some of Harvard’s $18 billion endowment and profited from Enron’s collapse.