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alance sheet. Through Sundance Industrial, the Insiders likewise improperly kept $375 million ofdebt off Enron’s balance sheet.318. Only a few days before the Sundance Industrial transaction closed, the Insiders askedCitigroup to assist them in improperly creating $20 million of income for Enron. Citigroup agreed,despite knowing that its part of the transaction had no business purpose apart from creating incomefor Enron’s end of second quarter 2000 income. At the Insiders’ request, Citigroup caused SolomonHolding to use $20 million of the $28.5 million cash contribution designated for Sundance Industrialto “purchase” Enron’s Class A equity in Sonoma. Then, Solomon Holding contributed to SundanceIndustrial $8.5 million in cash and a Class A equity interest in Sonoma. As the Enron Examinerexplained, “Enron somehow took the position that [its Sonoma interest] was worth $20 million, andby selling it to Citigroup . . . Enron believed it could record $20 million of gain and, therefore,income.” Exam. III, App. D at 131-32 (emphasis added). At the time Citigroup participated in thischarade, it knew there was no basis for valuing Enron’s equity interest in Sonoma at $20 million.It also knew the sole purpose of this aspect of the transaction was to generate income for Enronimproperly. As a result of this last-minute addition to Sundance Industrial, Enron’s incomeincreased improperly by $20 million.319. Citigroup was well aware that Bacchus could not properly be reported as a FAS 140transaction. Citigroup knew that its $6 million equity contribution was not at risk. BecauseCitigroup’s equity investment was not at risk, the Caymus Trust, and accordingly Sonoma, failedthe 3% equity rule. Accordingly, an “independent” third party did not acquire the Fishtail assets(and in any event the Insiders caused Enron to guarantee the entire purchase price on the “sale” ofits own asset).320. As a condition of proceeding with the Bacchus transaction, Citigroup sought andreceived Fastow’s oral assurances that, regardless of the value of the Bacchus assets, Enron would604041v1/007457-103-