Enron faces bribery charges

 

US federal prosecutors are investigating whether Enron, the bankrupt energy firm, may have bribed foreign government officials to win contracts for its international oil, gas and water businesses.

The disclosure underlined the breadth of the investigation into the company's labyrinthine operations.

Investors, politicians and the US media have begun to question why no moves have yet been made on former Enron executives after the arrests of senior figures implicated in more recent scandals at WorldCom, ImClone and Adelphia Communications.

The US Justice Department's Enron task force is examining the company's overseas operations for possible criminal actions.

Claims of corruption have been made against Enron since the mid-1990s over contracts in countries including Ghana, Colombia, Bolivia, Panama, Nigeria and the Dominican Republic.

In some cases, it was alleged in the Wall Street Journal, Enron won contracts without competitive bidding and assets were acquired at below-market values. Enron has, in the past, denied any suggestion of improper behaviour in securing contracts.

Mr John Ambler, a spokesman for the energy firm, said: "We are co-operating with federal authorities on a range of investigations and certainly would do so in this case." Government sources confirmed that the company's international contracts were being investigated. Ms Rebecca Mark ran Enron's international business before taking charge of the water division Azurix, where she hatched the deal to acquire Wessex Water in Britain.

A spokeswoman said she had strictly adhered to the rules of the US practices act against foreign corruption. She left Enron in 2000, cashing in shares worth $80 million (€81.2 million).

In Ghana, the World Bank suspended its support for a $100 million water project after it was awarded to Enron-owned Azurix without competition. At the time, the bank's Ghana director, Mr Peter Harrold, sent a letter to the local government cancelling a loan and alleging corruption.

The World Bank pointed to a $5 million payment up front by Enron, which Ghana newspapers claimed to have been for government officials. An Enron spokeswoman at the time denied the bribery claim but a new Ghanian government has since cancelled the contract and put it back out to tender.

Mr Damian Milverton, communications director at the World Bank, confirmed that the organisation had been concerned about the contract in Ghana. The World Bank has formerly questioned other Enron projects in Nigeria, India and Mozambique.

A number of other international projects have come under scrutiny since Enron spiralled into bankruptcy last year after admitting that it had been hiding debts off-shore.

A $2.9 billion power plant in India, which received US government backing, was mothballed last June after its single customer, the Maharashtra state electricity board said the prices were too high.

Last week, congressional investigators focused on a deal in Nigeria where Enron owns barge-mounted power plants.

It was claimed that an investment in the barges by Merrill Lynch enabled Enron to disguise loans and inflate earnings.