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Ex-Enron executive admits to fraud

Accountant says he inflated profits

HOUSTON -- The former top accountant for Enron Corp.'s profitable trading division said yesterday he improperly raided reserves to increase earnings in mid-2000 when he got word that former chief executive Jeffrey Skilling and other superiors wanted results that would wow Wall Street.

Wesley H. Colwell kicked off the fifth week of the fraud and conspiracy trial of Skilling and Enron founder Kenneth Lay, telling jurors he helped the company fraudulently manipulate earnings to meet or beat analysts' expectations by dipping into reserves when Enron needed an income boost that business operations didn't provide.

Colwell didn't say Skilling ordered him to plunder reserves to boost earnings. He said, however, that he e-mailed his boss -- then-Enron North America chief executive David Delainey -- days before Enron released second-quarter 2000 earnings to say he understood from then top Enron accountant Rick Causey that it was Skilling's ''preference" to beat expectations.

Twice within a five-day stretch between the close of the second quarter in 2000 and Enron's disclosure of earnings, Colwell reduced reserves by $7 million. The total $14 million was added to reported income so Enron could disclose earnings-per-share of 34 cents rather than the 32 cents Wall Street expected.

Other witnesses have testified that Skilling either ordered or had authority to order the last-minute increase in reported earnings-per-share in the second quarter of 2000.

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