Pretty creative tax avoidance structured transactions
Kinder Morgan Canada is little more than a Canadian face for one of the 50 richest American billionaires, Richard Kinder, and his Houston, Texas, based executive team -- many of them the same boys who brought us Enron.
Enron was a U.S. energy giant responsible for one of the biggest accounting frauds in history. According to Robert Roach, U.S. Senate counsel and chief investigator into Enron's collapse, Enron's executives began falsely inflating revenues and cheating on taxes way back in 1992 (page 16 Volume 1 of 2). When it became apparent what they were up to, the house of cards imploded. Enron filed for Chapter 11 bankruptcy on Dec. 2, 2001.
It is common knowledge that Richard Kinder -- chair and CEO of Kinder Morgan -- worked at Enron for 16 years. By the late 1980s he was vice-chairman of Enron's Board, becoming its president and chief operating officer (COO) in 1990. Kinder was instrumental (see page 109 and 119) in helping establish some pretty creative tax avoidance structured transactions the company became infamous for.
Kinder and his partner William Morgan -- another key player at Enron -- bought Enron Liquids Pipeline Company from Enron in early 1997. What is not generally understood is Kinder himself set Enron Liquids Pipeline Co. on its path five years before he bought the company. Kinder was a member of Enron Liquids Pipeline Co.'s Board of Directors when the company filed its initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC) in 1992.
It is also not common knowledge that at least four other key Kinder Morgan executives employed in senior positions today are Enron alumni. Three of them were with Enron when it went under and the SEC eventually brought one before the U.S. District Court on fraud charges.