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March 04, 2002 - Image 7

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The Michigan Daily, 2002-03-04

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The Michigan Daily - Monday, March 4, 2002 - 7A
Former Enron head defends handling of funds

Skilling alleges he does not
remember approving Enron's
questionable partnerships
WASHINGTON (AP) - Former Enron chief
executive Jeffrey Skilling defended himself in a
television interview and said he might stop
cooperating with a House panel that has chal-
lenged his testimony.
Lashing back at lawmakers, Skilling accused
them of deciding "that I am guilty until proven
innocent" in an election year. No one should
expect in the aftermath of Enron's collapse that
a top executive would have known everything
about the company's finances, he maintained in

an hour-long interview aired Friday night on
CNN's "Larry King Live."
"Does a CEO of McDonald's ... close out the
cash drawers of every store every night? ... You
rely on the people within the company," Skilling
The energy-trading company careened into
the biggest bankruptcy in U.S. history on Dec.
2, brought down by a web of partnerships used
to hide more than $1 billion in debt and propped
up by Enron's own plummeting stock.
Skilling said he could not recall being
involved in approving transactions related to the
Through his lawyer, Skilling on Friday told
the House Energy and Commerce Committee

- which is questioning the veracity of his
sworn testimony - that he may stop cooperat-
ing with the panel's investigation.
If "the tenor of your inquiry slides even far-
ther into a 'show trial' whose only purpose is to
convict my client before all the facts are in, then
we fail to understand the value in your inquiry,"
Skilling attorney Bruce Hiler wrote senior
members of the committee.
He said lawmakers "repeatedly misstated
facts, mischaracterized testimony and ... frus-
trated Mr. Skilling's honest attempts to answer
their inquiries by interrupting him at least 73
times" during his Feb. 7 testimony.
Lawmakers say Skilling, who resigned
abruptly last August, knew more about ques-

tionable financial transactions than he told two
congressional committees. They have asked him
to clear up what they see as discrepancies
between his testimony and accounts of former
Hiler, who appeared with Skilling in the
CNN interview, said he does not fear Skilling
being indicted on criminal charges in the Justice
Department's investigation of Enron.
"I do not think that should be in the cards,"
Hiler said. "A lot of facts have to come out yet."
® In contrast to Congress' judgment of Skilling,
he said, lawmakers have treated as a "heroine"
Enron executive Sherron Watkins - who testi-
fied that Skilling duped former Enron chairman
Kenneth Lay and the board.

"Sherron's entitled to her opinion," Skilling
said. "Sherron's not entitled to her own facts."
Enron's clout in Washington and its large
donations to campaigns of President Bush and
politicians of both parties were part of doing
business, Skilling acknowledged.
Despite the political spending, he said, "I cer-
tainly didn't see any government agencies
jumping in to help us out." Lay and other Enron
executives had phoned several Bush Cabinet
secretaries and other government officials seek-
ing help as the company foundered last fall.
A new poll by CBS News indicates 56 per-
cent of Americans believe the administration is
hiding something regarding its dealings with
Enron, up from 44 percent on Jan. 2.

Andersen to settle
lawsuits with $217
million payment

PHOENIX (AP) - Arthur Andersen, the
accounting firm at the center of the Enron
debacle, agreed Friday to pay $217 million
to settle lawsuits filed after the 1999 col-
lapse of an Arizona company accused of
bilking elderly investors.
The settlement resolves a case brought by
a bankruptcy trust for investors in the failed
Baptist Foundation of Arizona.
State regulators said the nonprofit foun-
dation, founded in 1948 to raise money for
Southern Baptist causes, wound up using
more than 120 shell companies to raise
cash. Three foundation officials later plead-
ed guilty to defrauding investors.
More than 13,000 people around the
country, many of them elderly Baptists, lost
nearly $570 million in the alleged Ponzi
The trust had sought $155 million in
compensatory damages from Andersen,
which handled the foundation's books.
The settlement also resolves a class-
action lawsuit by former foundation
investors, a civil suit by state regulators and
disciplinary proceedings brought by the Ari-
zona Board of Accountancy.
"These investors, many of whom are eld-
erly, trusted the misleading financial state-
ments audited by Andersen," Attorney
General Janet Napolitano said. "This agree-
ment will allow Baptist Foundation victims
to at least recover most of their investment."
Arthur Andersen said the firm had made

a business decision to settle the cases with-
out admitting or denying wrongdoing.
"This settlement is an important step in
building confidence in our firm," a compa-
ny statement said.
Andersen is under fire for its handling of
Enron's books and the shredding of docu-
ments related to the failed energy trading
giant. Enron collapsed into bankruptcy in
December in an accounting scandal.
The state's lawsuit alleged that Andersen
prepared financial statements for the Ari-
zona foundation that concealed huge losses
which should have been flagged to alert
Warnings were ignored or inadequately
investigated, allowing senior managers of
the foundation to mislead the board of direc-
tors and to engage in fraud at the expense of
investors, the suit said.
The trust said Andersen must come up
with the money by April 15. It said that after
litigation costs and attorneys fees, investors
will recover about $185 million through the
"It achieves our goal of getting signifi-
cant money back in the victims' hands soon,
rather than after a lengthy trial and years of
appeals that carried some significant risks,"
said Sean Coffey, the trust's lead attorney.
Forrest Bomar, a 73-year-old retiree from
Palestine, Texas, who lost $236,000 in the
collapse, said he was told he and his wife
would receive about 70 percent of their ini-

New radiation
devices could
detect nuclear
terror threats
WASHINGTON (AP) - The Energy Department is
developing a new generation of devices to detect nuclear
radiation, a capability that the Bush administration views as
vital in the battle against terrorism.
Administration officials said yesterday the emphasis on
radiation detection has grown in the aftermath of the Sept. 11
attacks and in response to fears that the al-Qaida terrorist net-
work may succeed in its ambition to obtain either a nuclear
device or materials to spread radiation in an urban area.
Several administration officials, speaking on condition of
anonymity, said, however, that they knew of no recent indi-
cations that al-Qaida had made any new progress toward
obtaining such materials.
The Washington Post reported in its editions yesterday
that the administration is alarmed by growing hints of al-
Qaida's progress in this area and that in response the govern-
ment has deployed hundreds of sophisticated sensors since
November to U.S. borders, overseas facilities and sites
around Washington.
Sen. Larry Craig (R-Idaho) said radiation sensors were
used at the Salt Lake Olympic Games and the Super Bowl in
New Orleans.
"We clearly are in heightened alert, and we should be;"
Craig said on CNN's "Late Edition." "At the same time, the
American people have to get on with their lives. But I want to
make sure that they are as safe as we can possibly make
Research and development of better radiation sensors is
being done by the Energy Department's national laborato-
ries, officials said.
The Post report said newer devices for detecting radiation
are placed around some fixed points in Washington. It said
the devices are called gamma ray and neutron flux detectors
that until now had been carried only by members of Nuclear
Emergency Search Teams, which-are- on standby at various
The Post also reported that Delta Force, the elite military
unit with anti-terror responsibilities, has been placed on a
new standby alert to seize control of any nuclear materials
that are detected by the new sensors.
Sen. John McCain (R-Ariz.) said yesterday he was unfa-
miliar with the deployment of newer radiation sensors. He
said it is well known that the U.S. government has been con-
cerned for years about nuclear materials falling into the
wrong hands - whether it be terrorists or governments hos-
tile to the United States.
"I don't know if the administration has new information
or not, but it seems perfectly logical that that would be one
of the avenues that a dedicated group of terrorists would
pursue," McCain said on CBS' "Face the Nation." "But
whether they have that capability or not, I just don't know."
McCain noted that searches of al-Qaida hideouts in
Afghanistan by U.S. forces have turned up plenty of evi-
dence that the terrorist network is interested in obtaining a
weapon of mass destruction.
"But I'm not sure that it's a reason for panic," he told
CNN. "I have seen no hard evidence that any terrorist organ-
ization has acquired these weapons, although Saddam Hus-
sein, as we know, has been making significant progress in
that direction."

Charles Bowsher, left, former Comptroller General of the U.S., talks with P. Roy Vagelos,
retired chairman and chief executive of Merck & Co., Inc., at a news conference in New
last week. Bowsher and Vagelos were appointed to an independent oversight board set 1
review the policies and procedures of the Arthur Andersen accounting firm.

tial investment.
"I'm grateful because this will eventual-
ly amount to more than we might have

seen, had we lived long enough, if the case
had gone through the court process,"
Bomar said.

Couple alleges ownership of Trade Center flag

NEW YORK (AP) - A couple say they are the own-
ers of an American flag that three firefighters hoisted
amid the ruins of the World Trade Center in a photo-
graph that became one of the most famous images of
Sept. 11.
Spiros Kopelakis and his wife, Shirley Dreifus, have
asked the firefighters to sign an affidavit stating that
they removed the flag from their charter yacht, which
was docked near the trade center.
"We don't want to be compensated for the flag, we
just want to be recognized," Kopelakis said yesterday.
"We want this flag to be treated in the right way."
The couple has asked the firefighters - Dan
McWilliams, George Johnson and Billy Eisengrein - to
look at photographs of their yacht, the 130-foot Star of
"There were only three boats there, and ours was the
only one with a missing flag," Dreifus said. "I don't
think it's a great mystery."
The couple said they would like to see the 3-foot-by-
5-foot flag displayed in a museum or as part of a trade
center memorial.
The firefighters have said they removed the flag from
a yacht docked at the North Cove pier on the Hudson
the michigan daily I

"We don't want to be compensated for the flag, we just want
to be recognized"
- Spiros Kopelakis
Alleged owner of World Trade Center flag

River and erected it at the trade center complex, a few
blocks away, to boost the morale of the Sept. 11 rescue
A lawyer for the firefighters, Bill Kelly, said he has
already arranged for his clients to try to identify the yacht.
"If they can sort of confirm that's the boat, I'm sure
there would be no problem," he said. "But I'm not even
sure they'll be able to do that because there were several
of those yachts back there."
The flag, which is currently flying aboard the U.S. air-
craft carrier Theodore Roosevelt, has been seen across
the world.
The photo of the firefighters raising the flag atop the
trade center rubble was taken by Tom Franklin, of The
Record of Hackensack, N.J. It has been likened to the
famous 1945 Associated Press photo of six American

fighting men raising the flag at Iwo Jima during World
War 11.
Dreifus and her husband said they were at home, just a
few blocks from the World Trade Center, the morning
two planes slammed into the twin towers. The office of
their yacht charter business, Majestic Star, was located
on the 89th floor of the north tower. Employees evacuat-
ed the building.
The couple, who said they have lost 95 percent of their
business since Sept. 11, insist they are not seeking any
financial gain from the flag. They said they simply want
the public to know that the flag came from the Star of
America, which was badly damaged by falling debris.
"We don't really have anything to gain from it," Drei-
fus said. "But if people want to charter this boat because
it's where the flag came from, that would be nice."

Students inquire about Civil Rights, integration

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AARMA, P.O. Box 2674, Ann Arbor, MI

Continued from Page 1A
often traveled the back roads in great peril and
worked to register black citizens as voters. All were
deeply affected by the 1964 deaths of three civil
rights workers near Philadelphia and Mississippi, but
they continued working aware of the danger.
"It was not just talking with these amazing peo-
ple," LSA Freshman Stephanie Fitzwater said. "It
was also seeing the environment in which the move-
ment took place and getting a sense for the emotions
behind it."
Fitzwater said the trip taught her more about
America's history than what she has learned in some
of her classes.
"There are different levels, and it is a lot more
complicated and a lot more human than what you
read in history books," Fitzwater said.
Each year, Gonzalez, joined by his wife Teresa
Buckwalter, said he tries to make this trip an educa-
tional and fun experience for the students.
"I wanted to be a teacher who made a difference in
Continued from Page 1A S
it will be moderate. e
Curtin said overall, "there is still a very positive
outlook for financial situations." Most consumers
continue to have positive buying attitudes about s
homes and vehicles, but they are dealing with

the lives of students and when I get back from a trip
that is exactly how I feel," Gonzalez said.
The trip is also accompanied by a three-credit
course on the Civil Rights movement taught by
Graduate Student Instructor Alyssa Picard.
The students also visited Shaw High School and
met with Jessie Williams, the first black teacher to
integrate a white high school in the Mississippi
Delta, who explained to them some of the faults in
the integration system.
"It made me question the way integration hap-
pened," LSA freshman Jennifer Nathan said. "It
seems to have happened on a superficial level and
kind of made everything move into a more subver-
sive form of racism that still exists."
Former SNCC organizer Bob Moses said the first
generation enjoyed their rights too quickly. Moses
has since started The Algebra Project, an organiza-
tion that sees mathematical comprehension as a tool
to create opportunity for those who have not yet
found equal education.
Some remembered Moses for his penetrating stare
and his deep sense of commitment toward achieving
"I'm still waiting to hear back from a number of A
places, but nothing looks very certain," Cusick
aid. "I'm not considering purchasing any big-tick- Con
et items on my own unless I definitely know I'm ern
going to be making some money after graduation." AID
Curtin said consumers continue to be the bright TI
ide in an otherwise lackluster economy. HIV
"The "key question is: How will business invest- "1

the ends the movement of the '60s never realized.
"I was overwhelmed by a sense of how much
needs to be done," Nathan said. But she, as most of
the students, said she gained a great deal of motiva-
tion from the trip.
"The sense I got from all those people was at no
point a sense of hopelessness," she said.
Fitzwater said she believes the root of the problem
lies in the movement's lack of addressing the eco-
nomic situation.
"They attempted to remedy the situation but the
problems ran a lot deeper. You have to look at eco-
nomics to find a way to make everything more
equal;' Fitzwater said.
Gonzalez referred to the class as an experiment in
"experiential education," and said he was first
inspired to teach the class because he "wanted stu-
dents to see a relationship between what they learn in
the classroom and the outside world."
"I like academic learning. It has its place," he said.
"But I believe it needs to be joined with experiential
learning in order for the student to learn the most
tinued from Page 1A
African regions have led to an increasing rate of
S fatalities.
'he discussion focused on the biological process of
infection leading to full-blown AIDS.
Those micro-organisms that at once lived with us


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