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To: maceng2 who wrote (153983)	2/28/2002 6:25:25 PM
From: maceng2	Read Replies (1) \| Respond to of 436258

The plot sickens news.ft.com CSFB team played key role in Enron partnerships By Joshua Chaffin and Stephen Fidler in New York Published: February 28 2002 20:44 \| Last Updated: February 28 2002 23:12 A group of bankers at Credit Suisse First Boston played a central role in creating the controversial partnerships that Enron used to hold billions of dollars of unprofitable assets and that eventually contributed to its bankruptcy. CSFB has handed over to congressional investigators materials related to its dealings with Enron, including the partnerships, as the focus of lawmakers' attention shifts from the accountants that checked Enron's books to Wall Street. The investigators are also seeking documents from other Wall Street firms that were close to Enron but an investigation by the FT has found that Enron depended heavily on a team within CSFB to engineer the partnerships. The team, known as the structured products group, was part of Donaldson Lufkin & Jenrette, which merged with CSFB in late 2000. The FT investigation found that, according to internal Enron calculations, the company paid more than $250m in fees to banks in 2000. DLJ and CSFB were among six banks to receive more than $20m in Enron fee income. The CSFB team worked closely with Andrew Fastow, Enron's former chief financial officer and his deputies, to develop partnerships that shielded unprofitable Enron assets before the energy company collapsed into bankruptcy on December 2. Laurence Nath, one of the co-heads of the group, spent weeks at a time in Houston, Enron's headquarters, working with Mr Fastow's team and Enron accountants to devise the Osprey, Marlin and Firefly partnerships that held some $4bn in assets, according to former Enron employees. The structured products group was created by DLJ, the US investment bank, in 1998. The group of 10 senior bankers typically used innovative, highly engineered financings to lessen clients' tax burdens and improve their financial position. "A lot of what Wall Street does is think up gimmicks that allow clients to take advantage of tax and accounting loopholes," one hedge fund manager said. "They try to thread the needle for you." Mr Nath and his team created two unique partnerships, Marlin and Osprey. They used Enron shares to bolster the partnerships' credit ratings and draw in more investors, and obliged Enron to kick in more shares should its stock price fall sharply. Bankers Trust and Deutsche Bank helped to sell bonds issued by the entities. Enron employees were also encouraged to steer underwriting assignments and mergers and acquisitions work to the investment bank, a former Enron employee said. CSFB said the firm, like others on Wall Street, was co-operating with investigators and regulators looking into the partnerships. "Enron knew and understood the partnership structures we worked on. The credit and stock price triggers were widely known," CSFB said.