HOUSTON – A former Enron in-house accountant struggled with tears Tuesday as she testified how she felt company bosses discriminated against her because she pushed for honest financial reporting.
Wanda Curry, who was assigned to analyze chaotic billing and losses in the company's retail division, told jurors in the fraud and conspiracy trial of Enron founder Kenneth Lay and former Chief Executive Jeffrey Skilling that she felt mistreated as she tried to get the company's papers straightened out.
"This is hard, I'm going to get emotional," she said as prosecutor Kathryn Ruemmler questioned her. "I felt I was being discriminated against because of my morals and ethics."
Under cross-examination, Curry said the retail division was in disarray not only because of the discovery under an Enron trader's desk of tens of millions of dollars worth of uncashed checks from a California utility, but also because of overvalued contracts to provide energy services.
She and her team revalued contracts, reducing them to more realistic numbers that were lower than the profits the unit had booked.
"We believed our estimate was fair," she told Skilling lawyer Ron Woods.
On Monday, Curry testified that Enron's books assumed the uncashed checks had been cashed.
"We began a quantification effort to know what the exposure was, not only what was received, but what we expected to receive," she said.
Curry's project, assigned by Enron's chief accounting officer Rick Causey and dubbed "Deep Dive," revealed wildly overvalued contracts along with the uncashed checks, like those from Southern California Edison.
"The number grew to millions, hundreds of millions of dollars," said Curry, who had been directed by Causey to "stop the bleeding."
The investigation had been prompted by repeated complaints from the Roman Catholic Archdiocese of Chicago, which contracted with Enron to provide energy services and had been disputing bills and complaining about a lack of consolidation by Enron.
Curry reported her findings in February 2001 to Causey and other superiors, then learned a month later the retail unit's trading operation — with its overvalued contracts — unexpectedly had been folded into Enron's more financially healthy wholesale division that encompassed the company's larger trading franchise, where the losses improperly could be hidden.
"I believe it was the catalyst that led to this decision," she said of her findings, which were explained by Enron as achieving greater efficiencies.
Curry, under cross-examination, said efficiency was unlikely because the retail contracts were far more complicated.
Curry, who did not report directly to Skilling or Lay, worked for Enron for 22 years. Although she has been interviewed by the FBI, she faces no criminal or civil charges and now works in Houston as a risk manager for Entergy, a Louisiana-based utility.
Prosecutors contend Lay and Skilling repeatedly lied about Enron's financial health while knowing fraudulent accounting propped up the company before it crashed into bankruptcy proceedings in December 2001.
The defendants say there was no fraud at Enron, and negative publicity coupled with diminishing market confidence fueled the company's swift collapse.
Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces seven counts of fraud and conspiracy. If convicted, both face decades in prison. Only Skilling faces allegations of improper stock sales.