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Opening Statement from Enron COO Jeffrey McMahon

Aired February 26, 2002 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Right now, on Capitol Hill, as were just saying, Congress is holding hearings, but will these Enron figures hold forth with answers? That's a good question this morning. Three top executives, two different versions of what was known and what was hidden in the shell game that triggered the largest corporate bankruptcy in U.S. history.

Lawmakers will again grill Jeffrey Skilling, former Enron chief executive who claims that he knew little of the shady partnership that concealed Enron's Enron's terminal debt.

Also set to testify, you see her here, Sherron Watkins. She is the Enron vice president, who issued her dire warnings of the accounting problems back in August, along with the third witness today, as he is going to be Enron's current president, Jeffrey McMahon. You see him there. Both McMahon and Watkins are expected to cast even more doubt on Skilling's denials.

Let's listen in for just a moment.

SHERRON WATKINS, FMR. ENRON EXECUTIVE: Enron had a brief window to salvage itself this past fall, and we missed that opportunity, because of Mr. Lay's failure to recognizing or accept that the company had manipulated its financial statements.

I intend to fully cooperate with this committee, and welcome the opportunity to answer any questions the senators may have.

SEN. BYRON DORGAN (D), NORTH DAKOTA: Ms. Watkins, thank you very much.

It is our intention to hear from all three witnesses, after which we will recognize senators for questions. Next we will hear from Mr. McMahon, the CEO of Enron Corporation.

Mr. McMahon, why don't you proceed.

JEFFREY MCMAHON, PRESIDENT & COO, ENRON: Good morning.

DORGAN: Excuse me, the president and chief operating officer, Mr. McMahon. I should not elevate you at this hearing.

MCMAHON: Good morning, Mr. Chairman and members of the committee. My name is Jeff McMahon. I'm currently the president and chief operating officer of Enron Corp. I've been an employee of Enron since 1994.

From late October of last year until early this month, I served as chief financial officer of the company. Before that, I was president and chief executive officer of Enron industrial markets group. And from 1998 until March 2000, I was a treasurer of Enron Corp. Before that, I served as chief financial officer of its European operations.

As the committee knows, earlier this month, I was named president and chief operating officer at the same time that Steve Cooper was named the new interim chief officer and chief restructuring officer of the company.

As part of the new management team at Enron, my focus is on the future, the future of the business, the future of our nearly 20,000 existing employees worldwide who are looking for continued employment, the future of our over 8,000 retirees who are looking for continued retirement benefits from the company, and the various other stakeholders, including creditors and former employees who have an interest in Enron's future.

Working closely with the board of directors and the creditors committee, we are developing a restructuring plan designed to bring the company out of bankruptcy and preserving value for the company's creditors, employees and stake holders.

I believe that Enron can emerge from bankruptcy by returning to its roots. As Mr. Cooper expressed at the announcement of his appointment as interim CEO, a reorganized business will be dedicated primarily to the movement of natural gas and the generation of electricity relating to the assets Enron currently owns.

With respect to the issues the committee is examining as the chairman knows, I have been fully and freely cooperating with this and other Congressional committees in this matter. And I welcome today's opportunity to answer to the best of my ability questions the committee may have about past events at Enron or our future direction.

Thank you, Mr. Chairman.

DORGAN: Mr. McMahon, thank you very much.

It's my understanding that a vote has just started on the floor of the Senate. I think we would be advised to take a 15-minute recess. There is only one vote. Members of the committee will be able to vote, and come back and reconvene immediately. This committee the stand in recess for 15 minutes.

HARRIS: With that, we got hear the tail end of Sherron Watkins comments this morning, and we did get to hear the entirety of Jeffrey McMahon's comments here, and that's just the very beginning, so we're going to let the senators go off and execute their vote, and take the 15-minute break.

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