S&P, Moody's blast Enron: Firm's new president accused of deception

WASHINGTON -- Officials of Wall Street credit-rating agencies testified Wednesday that Enron executives -- including Jeffrey McMahon, now the company's president -- had purposely misled them as far back as 1999 in an effort to bolster the company's credit standing.

Analysts for Standard & Poor's and Moody's Investors Services, told a Senate panel that top Enron officials concealed key information that would have hurt the company's credit ratings.

"Day by day, it becomes ever clearer that Enron ... committed multiple acts of deceit and fraud," S&P's Ronald Barone told the Senate Governmental Affairs Committee.

Although the agencies were quick to blame Enron, skeptical senators wanted to know why S&P, Moody's and Fitch Ratings were slow to downgrade Enron even as the company's stock was in free-fall.

Enron's credit ratings slid in October and November, but were not downgraded to "junk" status until Nov. 28. Enron filed for bankruptcy Dec. 2.

"You weren't as aggressive as you should have been," said committee Chairman Joseph Lieberman, D-Conn.

For the first time in the Enron debacle, critics pointed at McMahon, who had been unscathed by the company's misfortunes and had risen to become its No. 2 executive.