- The Washington Times - Monday, September 27, 2004

HOUSTON (AP) — As Enron Corp. scrambled to unload interest in several barges in December 1999, former finance chief Andrew Fastow contemplated coming to the rescue with a buyer he created so he would be a hero to then-President Jeffrey Skilling, Fastow’s former top aide testified yesterday.

The aide, Michael Kopper, said during the first criminal trial to emerge from Enron’s December 2001 crash that he considered it a risky deal for Fastow’s LJM2 partnership to buy into, even though Fastow said it would help Enron and “he would look like a hero to Jeff Skilling.”

But then-Treasurer Jeff McMahon was enlisting Merrill Lynch & Co. to buy the interest in the barges and allow Enron to book a $12 million pretax profit at the end of 1999 — and the brokerage came through.

The government contends in the conspiracy and fraud trial of four former Merrill executives and two former midlevel Enron executives that the sale was a sham because Fastow had promised that Enron would find another buyer or buy out Merrill’s interest itself within six months. The defendants contend that the energy company was never obligated to buy back the barge equity.

Mr. Skilling, who has pleaded not guilty to conspiracy and fraud charges in a separate case, was Fastow’s boss at the time of the barge deal.

And LJM’s time would come, Kopper said. In June 2000, Fastow called Kopper — who was a managing director both for LJM and Enron — and “kind of giggled” about LJM buying Merrill’s interest in the barges.

Kopper said Fastow told him Mr. McMahon had promised Merrill that Enron would ensure the brokerage’s barge interest would be bought out in six months, and Enron needed to follow through to maintain stature in the marketplace as a company that kept its word.

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