The 2,000-page report, which revealed that no income tax was paid from 1996 through to 1999, $63.2m (£39m) was paid in 2000, and then nothing in 2001, is damning reading for Vinson & Elkins, Akin Gump Strauss Hauer & Feld, King & Spalding, Shearman & Sterling and the firm's other external counsel.
“For many transactions,” the report said, “Enron picked from the same small pool of outside advisers. In some cases, if one adviser from the pool was not advising Enron in a particular deal, that adviser advised the other party (the promoter) to the transaction. Thus did incestuous relationships evolve among the participants in many of the transactions.”
The report goes on to describe the lack of responsibility or independent assessment that some advisers showed in evaluating Enron's stated business purpose as “troubling”.
It also said that a statement by the managing partner of Enron's primary legal counsel Vinson & Elkins “suggests that this minimal level of review perhaps was not unintentional.”
