Examiner Says Enron Hid Its Condition

Enron Corp. inappropriately counted $5 billion it raised in the four years leading to its December 2001 bankruptcy filing with the knowledge of two major banks that played “significant roles” in the transactions, a court-appointed examiner said.

Atlanta attorney Neil Batson, appointed by the Bankruptcy Court to examine Enron, said in a report that Enron repeatedly misrepresented its financial condition using a handful of accounting techniques to disguise loans as income.

Batson wrote that Citibank, a unit of Citigroup Inc., and J.P. Morgan Chase & Co. helped Enron devise the strategies known as “prepay transactions.” The banks deny anything was wrong with their relationships.