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Saturday, 12 January, 2002, 01:35 GMT
Enron chief asked Treasury for help
Graph of Enron's share price
The US Treasury Department has said one of its officials felt he was asked to help Enron last year by the company's president.

A Treasury spokeswoman said Enron's president Lawrence Whalley spoke to the department's Under Secretary for Domestic Finance Peter Fisher about six or eight times in late October and early November.

"As Enron's negotiations with its bankers for an extension of credit neared a decision point, the president of Enron asked Under Secretary Fisher to call the banks," spokeswoman Michele Davis said.

"Under Secretary Fisher inferred he was being asked to encourage the banks to extend credit. He made no such calls," she added.

The Treasury Department also disclosed that former Treasury Secretary Robert Rubin also telephoned them on Enron's behalf.

On Thursday it emerged that Enron Chairman Kenneth Lay called two US Government Cabinet officers before the company filed for bankruptcy late last year.

UBS wins auction

Meanwhile it was announced on Friday that the Swiss bank UBS had bid the highest amount to buy Enron's core trading operations.

Citibank and the British oil firm BP were also reported to be interested in buying the business.

Enron did not say how much UBS have bid for the business, but the company will release the details to a New York bankruptcy judge on Monday.

Trading in Enron shares was suspended before the announcement was made, and the New York Stock Exchange said they would remain suspended until more details of the UBS offer were known.

The firm's shares, which were once worth over $80, stood at just 67 cents at the close of trade on Thursday night.

Enron has already filed for chapter 11 bankruptcy - which allows a company to continue trading while seeking protection from its creditors.

Its collapse is the biggest corporate failure in US history, and it leaves debts behind of about $15bn.

The firm has already confessed to having inflated its profits and is under criminal investigation, as well as numerous other probes from regulatory bodies and Congress.

Deepening crisis

The seriousness of Enron's difficulties has recently entered a new realm.

The US Department of Justice confirmed that it had opened a criminal investigation into the suspicious dealings of the firm's management.

And it emerged that Enron Chairman Kenneth Lay, a long-time friend of the president, called two of President George W. Bush's Cabinet officers before the company filed for bankruptcy late last year.

The company's close ties to the Bush administration is quickly turning into a political liability for President Bush.

Mr Bush has already stressed that he is taking action to stop similar disasters, particularly where staff lost out due to the heavy investment of pensions into their own company's stock.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Rob Watson
"This is more than a story of corporate greed and corruption"
See also:

10 Jan 02 | Business
Enron documents 'disposed of'
10 Jan 02 | Business
Enron collapse prompts inquiry
12 Dec 01 | Business
Enron to start $6bn sell-off
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