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Counterspin Central: A Web Log dedicated to the poposition that no dishonest right-wing, propaganda will go unpunished, or unrefuted

SULLY IS SOOOO PREDICTABLE: Just like I predicted, Andrew Sullivan has already started the "what did Rubin know?" line of propaganda. Not only that, Sully lied his glutes off and claimed that Bob Rubin joined Citigroup in July of 1999! Sorry, Andy, but Rubin didn't join the company until October 26, 1999.

He also either misread the New York Times article, or deliberately misrepresented it, when he claimed that the deal between Enron and Citigroup was "cemented" in the Fall of 1999.

Au contraire! The deal itself was "cemented," meaning agreed to, by the late Spring of 1999. The Times reports:

"Money flows from the bank to the company, cash is paid back months later along with the equivalent of interest, and actual commodities rarely change hands. Technically, experts have said, such transactions — known as prepays — follow the requirements of the accounting rules, even if ultimately they can disguise the total debt held by a corporation.

But, for such transactions to be treated as prepays, one agreement must stay in force: the company must maintain its commitment to deliver a commodity — like natural gas — at some point in the future. If, instead, the company commits itself simply to return the cash, the transaction has been transformed from a prepay into a loan, pure and simple.

That is what happened in the Roosevelt transaction, documents and interviews show. In that deal, Citigroup agreed in late 1998 to transfer to Enron $500 million for six months as part of a prepay, with the company committing itself to deliver natural gas and oil at a future date. Terms of the deal called for portions of the debt to be sold off by May 1999 in chunks to other banks, to help spread Citigroup's risk — unless the commodity was delivered or the money advanced was repaid.

As that date approached, Enron asked Citigroup to extend the time in which it was allowed to make good on its side of the transaction, according to e-mail messages between senior Citigroup loan executives. Under the company's proposal, it would repay Citigroup $310 million — roughly the amount owed under the natural gas portion of the transaction. The remaining amount of roughly $190 million — which corresponded with the value of the crude oil prepay — would be paid back by Enron sometime in the fall.

That agreement was put aside in late April or May of 1999, and Enron was allowed to "prepay" by September 30, 1999.

Take it away Sullywatch!

Hesiod 2002 // 7/23/2002 02:46:42 PM

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SULLY CORRECTS HIMSELF: Andrew Sullivan has now revised his "What did Rubin know?" post to more accurately reflect the facts.

Now, he has to string together a bunch of Rube Goldberg assumptions and implications to make his argument, rather than facts.

Moreover, he doesn't even have the integrity to admit he got it wrong in his earlier post. He simply wiped away the error, and pretended he never screwed up.

Hesiod 2002 // 7/23/2002 05:14:10 PM

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