Enron Probe Moves Offshore

Senate Asks Banking CEOs About Enron's Offshore Activities

(CBS)  The Senate's Permanent Subcommittee on Investigations has asked the chief executives of Citigroup Inc. and J.P. Morgan Chase & Co., to provide sworn affidavits about the nature of offshore entities allegedly used to help Enron Corp. hide its financial condition.

That's according to the Wall Street Journal, which says committee chairman Carl Levin has sent letters to J.P. Morgan's William Harrison and Citigroup's Sanford I. Weill.

The panel is holding hearings on any role financial institutions may have played in the collapse of Enron and any accounting improprieties at the disgraced energy giant, whose downfall threw thousands of people out of work and turned their pension assets into little more than memories.

The two banks are accused by lawmakers of arranging offshore vehicles that the banks used to funnel money to Enron in ways that didn't appear on Enron's books as debt. The Journal reports that the energy company is accused of having used that money to artificially boost the numbers for cash flow.

J.P. Morgan declined to comment, according to the Journal, while Citigroup confirmed that it had received the letter and said it will continue to cooperate with the committee's investigation.

The Houston energy trader filed for bankruptcy-court protection on Dec. 2, pressured by debt.