J.P. Morgan in court papers asked a judge to exclude "J.P. Morgan Chase internal communications referring to `disguised loans,'" court papers said. The communications weren't specified in public documents.

The bank already has written off $456 million of trading contracts and loans with Enron.

Joe Evangelisti, a J.P. Morgan spokesman, declined to comment. The bank refused to describe its argument for excluding the communications from the trial.

"Most of the materials on both sides were filed under a confidentiality stipulation, so I can't get into the specifics," said John Callagy, a J.P. Morgan attorney. "Right now, my hands are tied."

The insurers have until Monday to respond to the request before U.S.
District Judge Jed Rakoff, who will preside over a trial in New York that begins Dec. 2, the one-year anniversary of Enron's bankruptcy filing.

J.P. Morgan shares rose 6 cents to $24.95 at 12:54 p.m. in New York Stock Exchange composite trading.

The company also wants to exclude testimony from David W. Wilson, an oil and gas industry expert hired by the insurers who said in a March affidavit that "unusual arrangements" in the contracts with Enron suggest they may have been loans.

In addition, the bank is seeking to prevent the insurers from introducing testimony given in pretrial depositions by Enron's ex- president, Jeffrey McMahon, and former Treasurer Ben. F. Glisan Jr. The court papers don't specify what the testimony was.

Celia Barenholtz, an attorney for Travelers Casualty & Surety Co. and other insurers in the case, declined to comment, saying that most of the documents were under court seal.

The insurers, which include Liberty Mutual Group and St. Paul Cos., issued surety bonds to guarantee that Enron would deliver natural gas and crude oil to Mahonia.

Members of the U.S. Senate Permanent Subcommittee on Investigations said in a July hearing that Mahonia was controlled by J.P. Morgan. The bank's chief executive officer, William Harrison, told the committee in a statement that J.P. Morgan incorporated Mahonia in 1992 as an independent company. While it was sponsored by the bank, Harrison said, J.P. Morgan had no direct control of the entity.

At the hearing, Sen. Carl Levin cited a 1998 e-mail between bankers in which one said Enron loved such transactions because "they are able to hide funded debt from their equity analysts," they allowed them to defer revenue, or "(better yet) bury it in their trading liabilities."

Donald McCree, a managing director for J.P. Morgan Securities Inc.,
testified that the e-mail was "an unfortunate statement" that did not
reflect how the bank viewed the transactions.

Rakoff ruled this month that "a reasonable juror" might conclude that the deals were a fraud.

Callagy said he was confident that a six-member civil jury will reject fraud allegations made by the insurers.

"They signed a contract with us, they knew what the transactions were all about, and they should pay," Callagy said. "It's very simple. They didn't misunderstand; they knew exactly what they were doing. They weren't defrauded. They just made that up."

J.P. Morgan Chase Wants to Bar 'Disguised Loans' Evidence
By David Voreacos, Bloomberg News
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