Congress Seeks Enron Documents From Wall Street Firms
DOW JONES NEWSWIRES
WASHINGTON -- The House Energy and Commerce Committee wrote Wednesday to 13 Wall Street investment and credit-rating firms seeking records on Enron Corp. (ENRNQ) and its partnerships.
The letters to chief executives of the firms are signed by committee Chairman Billy Tauzin, R-La., and ranking minority member of the committee Rep. John Dingell, D-Mich., as well as the Republican chairman and ranking Democrat of the subcommittee on oversight and investigations.
The companies addressed include Merrill Lynch & Co. (MER), Citigroup Inc., Credit Suisse First Boston Corp., Goldman Sachs & Co. (GS), J.P. Morgan Chase & Co. (JPM), Lehman Brothers (LEH), Morgan Stanley (MWD), Deutsche Bank North America, UBS PaineWebber Inc. (UBS), Wachovia Corp. (WB), Standard & Poors, Moody's Corp. and Fitch Inc.
Last month, Tauzin indicated the committee was preparing to send information requests to the Wall Street firms in what he described as the next phase of a sweeping investigation of Enron's bankruptcy last year.
The House committee has delved into Enron partnership transactions that helped conceal debt and overstate income, contributing to the Houston energy-trading giant's bankruptcy.
The committee has uncovered documents and heard testimony indicating Enron pressured the Wall Street firms into investing in the partnerships, and offered bond business and insider information in return for their participation.
The letters seek response by March 20 to information requests on the firms' dealings with Enron.
For the most part, the letters to the 10 investment banks follow the same seven-question format, though J.P. Morgan Chase and Wachovia get special scrutiny.
J.P. Morgan Chase is queried about its Mahonia Ltd. and Mahonia Natural Gas Ltd. energy-trading affiliates. Eleven insurance companies are suing the investment bank in federal court to prevent it from collecting nearly $1 billion for the affiliates' oil and gas transactions with Enron. The insurers say the Mahonia affiliates used commodity deals to camouflage loans that helped Enron cook its books.
The House committee also focuses on Wachovia's First Union subsidiary. Current Enron President Jeffrey McMahon testified a Houston-based First Union executive had said First Union was promised an Enron bond deal if it invested in Enron's LJM partnerships.
As for the three credit-rating agencies, the committee seeks explanation of Enron assessment processes and ratings for the past four years, as well as any consulting fees the agencies may collect from companies they rate. The committee also asks about reports that investment banks pressured the agencies not to downgrade Enron's debt.
-By Campion Walsh, Dow Jones Newswires; 202-862-9291; campion.walsh@dowjones.com
Updated March 6, 2002 5:17 p.m. EST |
