A member of Harvard’s highest governing board found himself in the hot seat this week as a company in which he is a key executive faces a government investigation.

Harvard Corporation member Herbert S. “Pug” Winokur ’64-’65, sits on the board of directors and chairs the financial committee for energy giant Enron Corp.—the subject of a Securities and Exchange Commission (SEC) investigation centered on possible conflicts of interest in the company’s investments.

Several years ago, to help keep the costs of the rapidly growing Enron off the balance sheet, then-Enron CFO Andrew S. Fastow—who was ousted in October—set up LJM investments, named for the first initials of his wife and children.

The company bought assets from Enron, while Enron’s holdings in LJM allowed it to maintain partial control of the assets. Problems arose when Enron began holding back information from investors. Analysts also began to question if there was a possible conflict of interest for Jeff Skilling, who was the managing partner in LJM and the Enron CFO, and was believed to be making a personal profit from the deals.

When confidence in the company and stock prices began to fall this summer, Enron was forced to end its connection with LJM and take a $1 billion write-off, a loss which it did not include in its third-quarter reports, further angering investors.

The SEC has since stepped in to investigate the possible conflicts of interest for Skilling and other executives and Enron’s withholding of information from investors.

Enron, which dominates the electrical and natural gas markets in the U.S., has seen its stock prices tumble since Oct. 16, when they announced huge third-quarter losses.

Skilling, who resigned this summer, testified before the SEC on Tuesday. Enron announced yesterday that it will hand over documents pertaining to the $1 billion write-off from the LJM partnership, as well as other materials concerning the relationship between Enron and LJM.

Winokur has not been directly implicated in the investigations but has been appointed to Enron’s new Special Committee headed by William Powers Jr., the dean of the University of Texas School of Law in Austin, Texas. The special committee will be in charge of any internal investigations into the dealings which the SEC is currently looking at, as well as all communications with the SEC.

Enron officials referred all questions to the press releases on their website.

Winokur did not return a call for comment.

Campus Reaction

The situation has gotten national press attention—and provided campus activists with an unusual springboard to criticize the Harvard administration.

An e-mail on the subject, written by Progressive Student Labor Movement member Benjamin L. McKean ’02, has been widely circulated on campus, prompting discussions of transparency at the University.

“He’s clearly deeply involved in this company. Being the chairman of the financial committee is no hobby. This is what he does for a living,” McKean said. Winokur, McKean noted in the e-mail, is “SQUARE in the middle” of Enron’s financial dealings as the chair of the finance committee.