Congressional investigators have expanded their probe of Enron to Wall Street, interviewing officials at some of the financial district's biggest firms about their ties to the collapsed energy-trading giant.
Citing a source familiar with the Congressional inquiries, the Washington Post said yesterday that investigators from the House Energy and Commerce Committee were focusing on firms that underwrote securities issued by Enron while also investing in and helping to raise money for partnerships that the company kept off its books.
The source told the paper the firms questioned included Merrill Lynch, First Union (now Wachovia), Lehman Bros, Credit Suisse First Boston; Citigroup; Deutsche Bank; JP Morgan Chase; and the CIBC World Markets unit of Canadian Imperial Bank of Commerce.
The newspaper said interviewers wanted to know whether Enron threatened to withdraw lucrative underwriting business from firms that declined to invest in the company's partnerships.
Congress also wants to know what role, if any, Wall Street played in assisting Enron in presenting balance sheets that showed a much rosier financial picture than actually existed.
As the fallout from the Enron scandal continued to dominate market sentiment, shares in Computer Associates slid yesterday after a report that authorities opened a preliminary inquiry into whether the company deliberately overstated profits to inflate its stock price.
The New York Times reported that, since October 2000, Computer Associates has reported its financial results using a non-standard "pro forma" accounting practice "that makes its profits and sales seem much larger than under standard accounting rules". But the company has denied these accusations, saying its accounting was and continues to be proper, according to the newspaper.
Meanwhile, General Electric, the world's largest company, bowed to investor pressure yesterday and said it would shed more light on its financial inner workings.