Dark Side of the MoonBut Layton, in a blistering cross-examination, said he couldn't recall whether he was specifically referring to the bank's now-controversial oil and gas deals with Enron when he wrote the emails. Nor did he recall receiving another email some six months earlier, in which a bank official provided Layton with a lengthy description of those oil and gas transactions.
|Excerpts from several emails Don Layton, a J.P. Morgan Chase vice chairman, wrote to other bank officials about J.P. Morgan's participation in so-called prepaid transactions.|
|"This is as much a loan as a commodity transaction. It is like the old 'hidden' loans in interest rate swaps." - Nov. 24, 1998 |
"There is a category of "disguised loan'' that shows up in many units of global markets. This is just one such example. I understand the credit has been laid off with insurance companies. That of course is just another form of reimbursement agreement."
- May 10, 1999
"We are making disguised loans, usually buried in commodities or equities derivatives (and I'm sure in other areas). With a few exceptions, they are understood to be disguised loans and approved as such. But I am queasy about the process." - May 12, 1999
"I have asked ... to coordinate a top level review of our disguised loans, and to work on developing a policy that meets all our needs, both technical and strategic." - May 21, 1999
"Disguised loans. This is a pejorative phrase, even if generally accurate." - May 24, 1999
"I don't recall what I had in mind," Layton testified at one point, when asked about the May 1999 emails by defense lawyer Alan Levine of Kronish Lieb Wiener & Hellman. The emails were shown to the jury and a packed courtroom on a large projection screen. Layton said he didn't mean to imply there was anything deceptive about the transactions by calling them "disguised loans." He called the phrase a "colloquial expression." Layton's testimony and the introduction of the emails could have a major impact on the outcome of the trial, which began three weeks ago in a Manhattan federal courtroom. Testimony is expected to wrap up tomorrow, with the case going to a jury of five men and one woman later this week.