In his report to the court, [bankruptcy] examiner Neil Batson said that in the [Enron-funded Bush campaign] year 2000, for example, Enron reported net income of $979 million but actually earned only $42 million. And its cash flow was a negative $154 million, instead of the reported $3 billion.
To conceal its poor performance, Enron used special purpose entities to employ six accounting techniques, outlined in voluminous detail by Batson in a 2,000-plus page report.
[...]
The report is likely to bolster the case of shareholders who are suing the company, legal experts said.
It also said that because many of the transactions were improper -- if not illegal -- as much as $5 billion in cash and assets could be recovered by the bankrupt company and, thus, its unsecured creditors.
[...]
The examiner several times specifically states Enron broke Securities and Exchange Commission rules and, in the case of special purpose vehicle and prepay transactions, materially misrepresented its financial condition.
"I think the fact that he used the word 'materially' is important. It expresses his belief that there is a substantive violation of criminal law," said Jacob Frenkel , a former federal prosecutor and SEC lawyer in Washington, D.C.
Frenkel also said he reads Batson's statements to be asking, "Why is it taking the feds so long to figure this out?"
Perhaps the feds are having difficulty recovering the $5 billion stolen from Enron shareholders, employees and creditors because they are so intently focused on quickly rounding up the purveyors of bongs.
