*House Panel Turns To Wall St In New Phase Of Enron Probe
DOW JONES NEWSWIRES
WASHINGTON -- The House Energy and Commerce Committee is preparing to send letters to Wall Street investment banking firms in what the committee chairman has described as the next phase of the panel's sweeping investigation of Enron Corp.'s (ENRNQ) stunning financial collapse.
The House panel, chaired by Rep. Billy Tauzin, R-La., has delved into the partnership transactions overseen by former Enron chief financial officer Andrew Fastow, which helped conceal debt and overstate income, and contributed to the Houston energy-trading giant's collapse last year.
In the course of that investigation, the committee uncovered documents and heard testimony indicating that Enron pressured the Wall Street firms into investing in the partnerships, and offered bond business and insider information in return for their participation.
"It appears that some investment bankers were sweet-talked and others were strong-armed into participating in many of Enron's questionable off-the-balance sheet partnerships," said Ken Johnson, Tauzin's press aide.
"Was it illegal? That's something we're trying to determine," Johnson said.
The letters could go out as early as Friday, but more likely will go out early next week, he said.
Johnson said the first firms to receive letters requesting information will be Citigroup Inc. (C), Credit Suisse First Boston Corp. (Z.CSF), Dresdner Bank AG (G.DRB), J.P. Morgan Chase & Co. (JPM), Morgan Stanley Dean Witter & Co. (MWD) and Wachovia Corp. (WB).
Other companies are likely to be contacted by the committee after the first wave of letters, according to committee staff who described the list as an evolving one.
Tauzin said after a hearing earlier this month that the roles of investment banking firms in the Enron partnerships represented a new phase of the committee's investigation.
In addition to delving into whether Enron may have inappropriately pressured the firms, or promised them future bonds offerings, to invest in the partnerships, the probe will seek to determine whether the firms' involvement affected the "buy" ratings of Wall Street analysts, Tauzin said.
-By Bryan Lee, Dow Jones Newswires; 202-862-6647;
Bryan.Lee@dowjones.com
Updated February 22, 2002 1:24 p.m. EST |
