Magazine article Newsweek

Enron: Expensing His Taxes

Magazine article Newsweek

Enron: Expensing His Taxes

Article excerpt

Byline: Mark Hosenball

In a plea-bargain deal last week with federal prosecutors, former ranking Enron executive Michael Kopper admitted participating in several schemes that allegedly defrauded the energy giant and possibly hastened its collapse. Financial records obtained by NEWSWEEK now offer a more detailed picture of how Kopper and other alleged participants in the schemes pocketed some of the money they got out of Enron deals.

The documents, including bank statements and canceled checks, come from the files of something called SONR #1 Limited Partnership, an entity run by Kopper and jointly owned by Kopper and his domestic partner, William Dodson. SONR was set up as a vehicle through which Kopper managed Chewco, yet another partnership, formed by Enron. The Feds allege (and Kopper admits) that Chewco generated large questionable returns to Kopper and Dodson and made dubious payments to Enron chief financial officer Andrew Fastow and his family. The documents show that Kopper wrote himself a monthly $1,500 check for SONR's office rent, even though it appears that SONR had no office of its own. Also, according to the documents, in 1999 and 2000 Kopper wrote SONR checks totaling nearly $220,000 to cover tax liabilities incurred by his partner, Dodson; he also wrote smaller checks to cover his own tax liabilities. (Some investigators say that tax reimbursements to business executives are sometimes legitimate, and that some of the tax payments made to Dodson and Kopper were approved in writing by Enron. …

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