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knowingly structured the prepaid transactions with Enron in a way that allowed Enron to engage infraudulent accounting and to make its financial statements less transparent.” Id. at 8 (emphasisadded). Citigroup entered into a Settlement Agreement with the District Attorney’s Office in whichit agreed to pay $25 million and adhere to internal reforms designed to prevent future abusive prepaytransactions. In a letter to District Attorney Morgenthau dated July 28, 2003, Citigroup Chairmanand CEO Charles Prince acknowledged Citigroup’s wrongdoing: “I want to assure you, bothpersonally and on behalf of Citigroup, that the Enron transactions do not reflect our currentstandards and they would not happen now – and will not happen in the future – at Citigroup.”(emphasis added).265. The Permanent Subcommittee on Investigations (“PSI”) of the United States Senatealso investigated Citigroup’s role in Enron’s collapse. As to the prepay transactions, the ChiefInvestigator for the PSI found that[i]nternal communications show that it was common knowledge among . . .Citigroup employees that the “prepays” were designed to achieve accounting, notbusiness, objectives and that Enron was booking the “prepay” proceeds as tradingactivity rather than debt. The evidence indicates that . . . Citigroup not onlyunderstood Enron’s accounting goal – increasing operating cash flow withoutreporting debt – but designed and implemented the financial structures to help Enronachieve this objective. Moreover, they accepted and followed Enron’s desire to keepthe nature of these transactions confidential.Roach Testimony at 3. He further concluded that Citigroup had knowingly assisted Enron inmisrepresenting its financial condition:The evidence reviewed by the Subcommittee staff indicates that the financialinstitutions that participated in Enron ‘prepays’ understood that Enron was seekingto obtain financing from them, but wanted to obtain the financing throughorchestrated, multi-party commodity (largely energy) trades rather than straight-outloans, so that the company could characterize the funds as cash flow from operationsrather than cash flow from financing. Internal communications show that thefinancial institutions not only understood that Enron intended to engage in thisdeceptive accounting, they actively aided Enron in return for fees and favorableconsideration in other business dealings.604041v1/007457-78-