NEW YORK, July 24 (UPI) -- Marc Shapiro, vice chairman in charge of finance at J.P. Morgan Chase & Co., said Wednesday on CNBC that the financial structures that the firm set up for Enron Corp., allegedly allowing the bankrupt energy trader to hide debt and move risk off its balance sheet, were normal.
J.P. Morgan Chase's handling of Enron's transactions was appropriate, Shapiro said.
Shapiro spoke just one day after U.S. congressional investigators said the bank, along with Citigroup Inc., for years helped Enron hide debt that ultimately led to the energy trader's collapse.
The banks also entered into Enron-style financing deals with at least 10 other unidentified companies, congressional investigators said Tuesday.
"The business we did was appropriate and normal, in the normal course of business," Shapiro said, adding that it "seems to me that the responsibility for what happened to Enron lies with its employees, its directors and its accountants."
Shapiro said he believes his company is being made a scapegoat because Enron has no money left.
The vice chairman said J.P. Morgan did not believe that Enron was hiding its debt or trying to fool investors.
"We were told and continued to believe that the accounting for the transaction was appropriate," he said.
The "Mahonia" deal, a deal J.P. Morgan devised for Enron, was a standard transaction, according to Shapiro.
He said special purpose entities, such as Mahonia, are used in thousands of structured transactions usually to lower financing costs.
"We shouldn't be held accountable for rules that were in existence," said the vice chairman, "(and) following the rules that were in existence."
J.P. Morgan does not believe it stretched the rules in the Mahonia deal.
"Many other financial institutions did these types of transactions, and they did them with many other companies," Shapiro noted.
J.P. Morgan stands behind its business dealings with Enron.
"We evaluated the company (Enron) based on the financials that they presented to everybody else," said Shapiro.
"There's nothing in our credit files that says you should reclassify this debt. They (Enron) had plenty of trading assets and what they were trying to do was monetize some of those trading assets," he noted.
