The WSJ Law Blog tips us to this article in today's WSJ about a looming trial in the Enron case against law firm Vinson & Elkins that is now set for October 2006.  The article notes that the lawsuit alleges that V&E "defrauded Enron investors by structuring 'phony' transactions used to inflate revenue and hide debt."

Beyond that, however, the article discusses yet another internal investigation conducted by V&E that is now the subject of some scrutiny.  Just last week we discussed here an article reporting the San Diego city attorney's intention to sue the law firm Vinson & Elkins for an internal investigation report that he says was a "whitewash" that failed to hold city officials fully accountable.

The WSJ describes testimony about another V&E internal investigation of Enron Corp. that is being scrutinized in the criminal trial of Ken Lay and Jeffrey Skilling, and whether or not it was--here's that word again-- a "whitewash":

Testimony about Vinson at the trial mostly has been prompted by questions from defense lawyers, who are trying to persuade the jury that accountants and lawyers fully vetted Enron's operations.

Vinson in 2001 conducted an investigation for Enron of complaints raised by Sherron Watkins, a finance executive who fretted in a letter to Mr. Lay that the company might "implode in a wave of accounting scandals." Vinson partner Max Hendrick III testified that the probe was "professional" but limited in scope. The inquiry cleared Enron of wrongdoing. Asked if it was a "whitewash," Mr. Hendrick testified that it wasn't.

The article adds that Bill Lerach, whose firm is lead counsel in the trial against Enron (and V&E),

says evidence in the criminal trial that shows that Vinson signed off on allegedly fraudulent transactions "will be useful in the civil suit." He has had a lawyer from his firm attending every day of the trial. His firm is Lerach Coughlin Stoia Geller Rudman & Robbins LLP.