Enron aggressively manipulated the US tax code so that it paid no federal income taxes from 1996 through 1999, a report by congressional investigators released today showed.
The failed energy giant Enron avoided taxes by using a series of transactions so complex that the Internal Revenue Service had trouble understanding them, according to the report.
"Enron not only engaged in accounting gimmicks to boost stock prices, but Enron repeatedly abused the tax code. And they had help from investment bankers, lawyers, and accountants," said Senator Max Baucus, the top Democrat on the Finance Committee, which is responsible for writing tax law in the chamber.
"The report reads like a conspiracy novel, with some of the nation's finest banks, accounting firms and attorneys working together to prop up the biggest corporate farce of this century," said Senate Finance Committee Chairman Charles Grassley, an Iowa Republican.
Now-bankrupt Enron also paid just $325 million in federal income taxes for the period 1990 to 1995 and $63 million for the 2000 to 2001 period.
The report said Enron profited from 12 large tax deals from 1995 to 2001 that saved the corporation over $2 billion.
Among those named in the report as aiding Enron's tax deals was former Enron accounting firm Andersen, convicted last year of obstructing the government probe on Enron's collapse.
Also mentioned were accountants Deloitte Touche, investment banks Chase Manhattan - now part of JP Morgan Chase - Bankers Trust and Deutsche Bank, now merged.
"Enron's behavior illustrates that a motivated corporation can manipulate highly technical provisions of the law to achieve significant unintended benefits," said a statement by Ms Lindy Paull, chief of staff of the Joint Committee on Taxation.
"The report's detailed analysis of Enron's structured transactions reveals a pattern of behavior showing that Enron deliberately and aggressively engaged in transactions that had little or no business purpose in order to obtain favorable tax and accounting treatment," Ms Paull said.
Enron filed for bankruptcy in December 2001, amid revelations of previously secret off-the-books partnerships that hid debt and enriched certain executives.
Enron's former chief financial officer Mr Andrew Fastow, the highest ranking company official indicted so far in the government's probe, faces 78 counts of fraud, money laundering and other offenses. Fastow has pleaded not guilty.