Congressional investigators have expanded their probe of Enron Corp to Wall Street, interviewing officials at some of the financial district's biggest firms about their ties to the collapsed energy-trading giant, The Washington Post said yesterday.
Citing a source familiar with the congressional inquiries, the newspaper said investigators from the House Energy and Commerce Committee were focusing on firms that underwrote securities issued by Enron while also investing in and helping to raise money for partnerships that the company kept off its books.
The source told the paper the firms questioned included Merrill Lynch & Co; First Union (now Wachovia); Lehman Bros; Credit Suisse First Boston Corp, a unit of Credit Suisse Group Inc; Citigroup Inc; Deutsche Bank AG, J.P. Morgan Chase & Co and the CIBC World Markets unit of Canadian Imperial Bank of Commerce.
The newspaper said interviewers want to know whether Enron threatened to withdraw lucrative underwriting business from firms that declined to invest in the company's partnerships.
"We're trying to determine if any promises, or for that matter any threats, were made to investment bankers" by Enron executives to get the banks to invest in the partnerships, said Ken Johnson, a spokesman for Rep. W.J. "Billy" Tauzin, the Louisiana Republican who chairs the House Energy Committee.
Congress also wants to know what role, if any, Wall Street played in assisting Enron in presenting balance sheets that showed a much rosier financial picture than actually existed.
The Post said a House hearing on Wall Street's possible role in the collapse of Enron could be scheduled as early as next month, with similar hearings likely in the Senate as well.
Enron collapsed in December, the biggest-ever US corporate bankruptcy, amid questions about dealings with special partnerships that its own investigators have found were used to hide debt and inflate profits by nearly US$1 billion.
Federal investigators have launched numerous probes into Enron's complex off-balance-sheet transactions, its relationship with accounting firm Andersen and potential securities fraud.
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