BLOOMBERG NEWS
September 28, 2004
Former Enron Corp. executive Michael Kopper said his ex-boss, Andrew Fastow, promised to buy back Merrill Lynch & Co.'s interest in Nigerian barges as part of a plan to falsely boost Enron's revenue by $12 million.
As a witness in the criminal trial under way in Houston federal court, Kopper, 39, a Long Island native, bolstered assertions by former Enron and Merrill employees who testified last week that the defendants knew the barge sale was a sham. They hid the buyback because, under accounting rules, it would make the sale a loan that Enron couldn't claim as revenue, they said.
Fastow, Enron's former chief financial officer, "made a promise to Merrill Lynch that Merrill would be out of the Nigerian barge transaction," said Kopper. Defense lawyers raised questions about whether Enron had only promised Merrill that it would find a third party to purchase its interest.
The criminal trial of two ex-Enron and four ex-Merrill employees is the first stemming from the accounting fraud that led to Enron's bankruptcy, the second largest in history. The defendants, accused of taking part in the barge transaction, said they thought it was a true sale with no buyback guarantee.
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http://www.newsday.com/business/ny-bzenro283987424sep28,0,3946986.story?coll=ny-business-headlines
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