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Friday, 1 March, 2002, 12:39 GMT
CSFB in Enron probe
Enron logo and dollars
Wall Street investment bank Credit Suisse First Boston has defended its role in advising Enron, the bankrupt energy giant, after reportedly handing over documents to Congressional investigators.

CSFB 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, the Financial Times newspaper reported.

In response, CSFB acknowledged its links to Enron but said its work was reviewed by lawyers, auditors and credit ratings agencies.

"The partnerships that CSFB worked on were reviewed by the ratings agencies, outside counsels, and the accounting firms," a CSFB spokesman said.

Three partnerships

Enron depended heavily on a team within CSFB, known as the structured products group, to engineer the partnerships, according to the FT report.

Enron knew and understood the partnership structures we worked on

CSFB spokesman

It said the team worked closely with Andrew Fastow, Enron's ex-chief financial officer, and his deputies to develop partnerships that shielded unprofitable Enron assets.

It reportedly devised three partnerships, known as Osprey, Marlin and Firefly, which held a total of $4bn (2.8bn) in assets.

The team was part of US firm Donaldson Lufkin & Jenrette (DLJ), which merged with CSFB in 2000.

Enron reportedly paid $250m in fees to banks in 2000, with DLJ and CSFB featuring among six banks that received more than $20m, the FT reported.

'Enron understood'

CSFB has said it is co-operating with Congressional investigators and has handed over documents about its work for Enron.

Furthermore, it insists that "Enron knew and understood the partnership structures we worked on," according to a CSFB spokesman cited by the FT.

Former Enron chief executive Jeff Skilling has told Congressional investigators he did not fully understand the complex web of partnerships.

"Whistle-blower" Sherron Watkins has also told Congressional panels of her belief that Ken Lay, Enron's ex-chairman, did not understand them.

Joseph Berardino, chief executive of Enron's audit firm Andersen, has denied that his firm helped Enron to set up a series of complex external financial partnerships to squirrel away millions of dollars of undisclosed debt.

He told the House Financial Services Committee in Washington: "We did not help to establish. We reviewed the accounting that others developed."

See also:

05 Feb 02 | Business
Audit giants called to account
29 Jan 02 | Business
Andersen on the defensive
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