WASHINGTON – Bankrupt energy trading giant Enron has agreed to release its tax returns since 1985, and those of its affiliates and partnerships, as part of a Senate panel's investigation into whether the company improperly avoided paying taxes.
In a letter to senior Finance Committee members, attorney Fred Goldberg said Enron will cooperate by waiving federal tax privacy protections so that Congress can determine whether laws need to be changed in the aftermath of the energy trading giant's downfall.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said Friday the panel has begun a "thorough and comprehensive probe" into the use of tax shelters or other devices that might have played a role in Enron's demise.
The question, Baucus said in a statement, is "whether Enron may have engaged in aggressive tax planning to improperly avoid paying federal income taxes or exploited loopholes in our tax system requiring attention."
Through use of tax deductions for stock options, entities in offshore tax havens and tax shelters, Enron appears to have avoided paying corporate income taxes in four of the past five years, netting a total refund of $381 million, according to an analysis by the labor-funded Citizens for Tax Justice.
The Finance Committee will work closely with the Internal Revenue Service and with current and former Enron employees as part of the probe, Baucus said.
He and the committee's ranking Republican, Sen. Charles Grassley of Iowa, have also asked the bipartisan Joint Committee on Taxation to conduct an analysis of Enron's returns and recommend any needed reforms.
The tax returns will not be available for complete public inspection, Baucus said, because of "the important principle of taxpayer confidentiality." Much of their contents will become public as part of the committee's work and reports, he added.
The investigation will also look into Enron's employee compensation arrangements, 401(k) plan and other methods of deferred compensation, Baucus said.
The Associated Press contributed to this report.