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April 15, 2002
Arthur Andersen and Dynegy's Tax Ploy
ARLINGTON, VA, APRIL 15, 2002: Dynegy, Inc., the Enron rival that was tipped as a potential rescuer last November before it saw Enron's books, later bragged that it had not engaged in Enron's dubious accounting practices. The Wall Street Journal, however, has since reported that Dynegy engaged in questionable acts with accounting firm Arthur Andersen, describing an accounting ploy designed to dress up Dynegy's bottom line.

In a news analysis for TAX NOTES magazine, contributing editor Lee Sheppard points out that the accounting scheme, which involved a natural gas purchasing partnership, wasn't much of an accounting ploy. Instead, she writes,"It was a tax ploy masquerading as an accounting ploy." Dynegy reportedly claimed a one-time tax saving of $80 million on its books.

Click here for the full text of Sheppard's article, including a detailed analysis of the Dynegy tax shelter. Sheppard's article appears in the April 15 issue of TAX NOTES magazine, a weekly magazine covering federal, state, and international tax issues.

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Media Release 2002-4

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