Enron's off-balance-sheet partnerships allegedly enriched a number of the bankrupt energy trader's officers and employees.

Auditors and analysts either did not spot them, or waved them through.

However, on closer scrutiny, the three partnerships at the centre of the case against Mr Michael Kopper, a former Enron executive, look like classic examples of the self-dealing, sham transactions and blatant self-enrichment which led to the company's implosion last December.

Chewco was established in 1997 to replace another legitimate Enron partnership. But it was troubled from the beginning.

Mr Andrew Fastow, the chief financial officer who could not find anyone to run it, first suggested himself for the role. He was already in charge of other partnerships. But Enron's lawyers informed him that his participation would have to be disclosed publicly.

Mr Fastow considered members of his wife's family before finally tapping Mr Kopper, a close friend and his deputy, for the job that November.

Enron's lawyers drew up the paperwork in just 48 hours. For a $125,000 (€127,447) investment, Mr Kopper took control of Chewco through two separate entities.

His conflict of interest posed obvious problems. There were complaints at Enron that Mr Kopper had negotiated a deal for Chewco that was grossly unfair to the company.

Mr Jeffrey Skilling, Enron's former chief executive, participated in a board conference call on November 5th at which Chewco was presented.

Mr Kenneth Lay, former chairman, later told the internal committee that was investigating Enron's collapse that he did not know who Mr Kopper was, and was unaware of his dual role.

A bigger problem for Chewco was that Enron could not dredge up the 3 per cent outside equity that would enable Enron to sweep the partnership and its debt off the balance sheet.

The company used creative accounting to solve the problem. It accounted for an $11.4 million loan extended to Mr Kopper by Barclays Capital as an "equity loan".

It looked like a normal loan, including regular "yield" payments by Mr Kopper and partial backing by Enron. Yet it was recorded in the company's books as equity.

Chewco was one of the financial bombshells that rocked Enron when accountants finally determined in November last year that it had to be brought on to the company's balance sheet.

Overnight, Enron had to erase more than $400 million in earnings for the period from 1997 to 2001, and absorb more than $2.5 billion in debt.

But Chewco was a windfall for Mr Kopper, who recouped his $125,000 investment several times over.

In addition to $2 million in dubious management fees, he and Mr William Dodson, his live-in partner, received over $10 million when Enron repurchased their shares in March 2001.

With Mr Fastow's help, Mr Kopper even convinced Enron to pay $2.6 million of his Chewco taxes as part of the deal. The other strand in the investigation that leads to Mr Fastow is Mr Kopper's involvement in Southampton Place, a partnership set up by Mr Fastow.

According to the February internal investigation into the off-balance-sheet deals, Mr Fastow, Mr Kopper and the other Enron employees received "vast returns" from Southampton when another deal with one of Enron's off-balance-sheet partnerships was unwound.

The case against Mr Kopper also focuses on a third, little-known scheme, called RADR thought to stand for "risk-adjusted discount rate" set up in 1997 when Enron needed to sell its wind-power farms.

Mr Kopper and others received $2.7 million from the RADR scheme, the SEC says. - (Financial Times Service)