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To: stockman_scott who wrote (48822)	3/20/2002 10:41:13 AM
From: Sully-	Respond to of 65232

Moody's Official: Enron Lied to Us Associated Press By MARCY GORDON AP Business Writer Moody's Official: Enron Lied to Wall Street Credit Agency on Finances, Leading to High Rating WASHINGTON (AP) -- An official of a major Wall Street credit-rating agency told Congress Wednesday that Enron Corp. executives lied to his agency in late 1999 about partnerships that were used to conceal massive debts. Lawmakers and regulators dissecting the biggest corporate failure in U.S. history are examining why the big credit-rating agencies, such as Moody's Investors Service, Standard & Poor's and Fitch Ratings, maintained high ratings for Enron until a few days before its bankruptcy filing Dec. 2. The complex web of partnerships, improperly buttressed by Enron stock, ultimately brought down the energy-trading company. The agencies' grading of companies' creditworthiness is closely watched by the markets. John Diaz, managing director of Moody's, told a Senate panel that Enron gave the agency information on its finances in the fall of 1999 that company executives described as a comprehensive, "kitchen sink" disclosure. "We now know that material information was missing" and that Enron failed to disclose the existence of three of the partnerships, Diaz said in testimony for a hearing by the Senate Governmental Affairs Committee. Furthermore, based on what has become known recently about Enron, Diaz said, "Much of the information that was provided was inaccurate." He said Enron had made a concerted effort to get an upgrade of the rating of its long-term debt. After Moody's reviewed the information the company provided, the agency upgraded the long-term debt in March 2000, Diaz told the committee. The Securities and Exchange Commission, which is pursuing a civil investigation of Enron and its former auditor, the Arthur Andersen accounting firm, also is examining the role of the credit-rating agencies. The agencies detected signs of financial trouble at Enron last spring but didn't warn investors by lowering Enron's credit rating until the fall, when the company had spun out of control. The SEC is trying to determine whether the delay was due to pressure from investment banks that were trying to put together a merger to rescue Enron. biz.yahoo.com

To: stockman_scott who wrote (48822)	3/20/2002 10:51:13 AM
From: Sully-	Respond to of 65232

S&P Says Enron Committed Fraud, Deceit NEW YORK (Reuters) - Standard & Poor's said on Wednesday that bankrupt energy trader Enron Corp. (Other OTC:ENRNQ.PK - news; NYSE:ENE - news) ''committed multiple acts of deceit and fraud'' on the credit rating agency. Ronald Barone, an S&P managing director, said in a statement the Houston-based company made a number of ``direct and deliberate misrepresentations ... relating to matters of great substance.'' This, he said, included Enron's failure even to mention many off-balance-sheet partnerships, including the Chewco, LJM1 and LJM2 partnerships overseen by former Enron Chief Financial Officer Andrew Fastow, who was ousted in October. He said Enron failed to disclose these in three presentations it made to S&P in 1999 and 2000, which he said purported to provide a ``kitchen-sink'' analysis of Enron. Barone, along with officials from Moody's Investors Service and Fitch Ratings, is scheduled on Wednesday to testify before the Senate Governmental Affairs Committee over the credit rating agencies' role in Enron's downfall. Securities and Exchange Commission Chairman Harvey Pitt and many market participants and politicians have publicly faulted the agencies for failing to downgrade Enron last November as the company's problems mushroomed. All three agencies rated Enron ``investment-grade'' as late as four days before Enron filed for bankruptcy protection on Dec. 2. Some lawmakers have publicly called for greater federal oversight of the agencies. The agencies are paid by the companies they rate. Companies need to be rated to sell debt, and are often privy to nonpublic information about companies' finances. Moody's is also expected in its testimony to fault Enron for failing to disclose the Fastow partnerships, the New York Times reported on Wednesday. S&P's Barone said that if Enron had told the truth about its finances, ``the impact on Enron's rating would have been significant. ``The clandestine dealings and obfuscatory disclosure practices conducted by Enron's management would have cast long shadows on the validity of Enron's credibility in general and its financial reporting in particular,'' he said. biz.yahoo.com