Ex-Fastow aide recalls sham deals at Enron

HOUSTON — A former Enron investment analyst on Tuesday corroborated testimony from a key prosecution witness that the company improperly used partnerships to help its earnings seem better than they were.

But Chris Loehr, who worked for partnerships run by former Enron Corp. Chief Financial Officer Andrew Fastow, could not directly link ex-CEO Jeffrey Skilling to the deals because his contact with the company’s top echelon didn’t stretch that far.

Loehr didn’t even mention Skilling or Enron founder Kenneth Lay under questioning from a prosecutor in the fraud and conspiracy trial of the two executives. His testimony corroborated that of Fastow, who on Monday finished four days on the witness stand.

The investment analyst described several transactions in which Fastow’s LJM1 and LJM2 partnerships bought whole or part interest in Enron assets, allowing the energy trading company to book earnings.

Fastow, who pleaded guilty to two counts of conspiracy in January 2004, had testified that he created the entities exclusively to conduct such deals with Enron.

Loehr, who is testifying as part of an immunity deal, said Fastow told him Enron gave unwritten assurances it would resell or buy back those interests at a profit, which meant the deals weren’t legitimate because the partnerships’ investments weren’t at risk.

The investment analyst didn’t say who gave Fastow the assurances, but Fastow testified last week he got them from Skilling.