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minority investor and reported the Nahanni debt on its balance sheet.” Exam. III, App. D at 115.Second, by its terms the Nahanni transaction was designed to last no more than a few weeks, justlong enough for the Insiders to artificially inflate Enron’s financial results for 1999. The transactionclosed on December 29, 1999 and the debt was repaid on or about January 13, 2000. The timingalone exposed Nahanni as, in the Enron Examiner’s words, nothing more than a scheme to “improveartificially [Enron’s] year-end reporting.” Id. at 113. Third, the Insiders should never have recordedthe sale of Treasury bills as cash flow from operating activities. Prior to Nahanni, Enron’s merchantinvestment operations did not include the sale of Treasury bills, and Nahanni provided no reasonablebasis for doing so then. The Enron Examiner characterized this derogatorily as one of the mostaggressive uses of MTM accounting.313. Citigroup knew Nahanni could not properly be accounted for as a minority interesttransaction. Citigroup knew the 3% equity investment in Nahanni was improperly supported by theNahanni L/C because Citigroup had both structured and helped document the transaction. Theprotection that the letter of credit gave to the equity investor was similar to that given to the equityinvestor in Nighthawk – the one that Citigroup’s internal accountants concluded eliminated all riskof the investment. Citigroup also knew the Nahanni transaction was no more than a year-endmanipulation of Enron’s financial statements. The transaction documents required that thetransaction be unwound by no later than January 27, 2000. The Citigroup officer responsible for thetransaction reported that “Enron will agree to repay [Nahanni] by January 14th.” CITI-B 00289599.(That is why Citigroup internally referred to Nahanni as “year-end window dressing” and“essentially an insurance policy for YE balancing.’” CITI-B 00289597.) Finally, Citigroup knewthat Enron’s operations did not include selling Treasury bills, so the Insiders could have nolegitimate basis for claiming $500 million as cash flow from operations based upon their sale.604041v1/007457-100-