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Witness: Fight over Enron deal not reported

Published Aug. 28, 2005

A former Enron Corp. executive's dramatic account of a confrontation over an alleged sham sale of three barges to Merrill Lynch & Co. was never documented or reported to her superiors, she testified Wednesday.

But Amanda Colpean said she was ordered by a colleague to lie about the transaction and manipulate documents, so that the sale appeared to be legitimate _ and Enron could satisfy its auditors. Ultimately, Colpean and 10 other Enron executives signed off on the paperwork.

Colpean was the first witness to testify in the conspiracy and fraud trial of four former Merrill executives and two former midlevel Enron executives accused of pushing through the deal in late December 1999.

Prosecutors say Enron wrongly booked a $12-million pretax profit from the deal because the energy company _ specifically, former Enron finance chief Andrew Fastow _ secretly promised that Merrill's interest in the barges would be repurchased within six months. A Fastow-run partnership bought the interest in late June 2000.

The second witness to testify Wednesday, John Garrett, answered to Colpean at Enron and was a member of the barge deal team. He said that before Merrill surfaced as a buyer, the team tried in vain to negotiate with other buyers.

But those companies wanted a buyback guarantee, given Enron's fervor to close the sale so quickly that they didn't have enough time to really study the purchase, Garrett said.

The defendants are: Sheila Kahanek, a former Enron accountant; Dan Boyle, a former finance executive; Daniel Bayly, former chairman of investment banking for Merrill Lynch; Robert S. Furst, the former Enron relationship manager for Merrill Lynch; James A. Brown, former head of Merrill Lynch's asset lease and finance group; and William Fuhs, former Merrill Lynch vice president.