The Faces of Enron

The PSI’s Red Flags and Beyond

Senator Levin argued that the “red flags” on his chart represented “what the Board knew and when they knew it.” But he didn’t read the entire list of 16 red flags at the Hearings. The 16 red flag dates and events are in the table below and reprinted here (for ease in reading). As the Senator mentioned, there seemed to be no concern until an article in Fortune in March 2001. Soon after that, the board was told that 64% of their international portfolio was “troubled” and 45 million Enron shares of common stock were at risk because of activities in Raptors and Whitewing.

The official transcript of the Hearings on May 7 2002 was published, as is customary, by the Governmental Publishing Office (GPO). It is 753 pages long because of all the exhibits. The exhibits include such items as the minutes of the Finance Committee, the Audit Committee, and the Board. They also include the constitutions of all Board committees and much, much more. One of the exhibits is the chart of red flags (on page 203).

Red Flags Known to the Enron Board

Exhibit #1: Red Flags Known to the Enron Board (easier to read reprinted list here)
Source: U.S. Senate, “The Role of the Board in the Enron Collapse”
Committee on Governmental Affairs, Permanent Committee on Investigations, May 7, 2002.