IT IS EASY to see how David Bermingham began to see himself as one of Tom Wolfe’s “masters of the universe” when the chief money man at America’s hottest company invited him into a deal that was to turn £133,000 into £3.9 million in less than a month.

Even today, as he possibly faces up to 35 years in prison for his part in the transaction, he doesn’t shy away from Wolfe’s description of his kind in The Bonfire of the Vanities: the rich species that oils the wheels of business and finance with skill and charm.

“Perhaps I did think I was a master of the universe,” admits Bermingham. “I had been embraced by this genius, invited into his world. He was acknowledged as one of the greatest businessmen on the planet. He was a man who could do no wrong. But looking back, one has to question what it did for my moral compass. I believed in him completely.”

The “man who could do no wrong” is Andrew Fastow, the chief financial officer of Enron, a man lauded in Wall Street as the best in the business. And in 2000, when Bermingham and two of his colleagues, Gary Mulgrew and Giles Darby, were invited into his deal, Enron was regarded as the smartest company in the US, an oil and gas entity that had grown into America’s seventh-largest corporation in just 15 years. Who was to know that within 12 months it would become the US’ s largest bankruptcy, collapsing under $16 billion (£8.5 billion) of debt?

Bermingham, Mulgrew and Darby, three British former NatWest employees, are facing extradition to Texas on charges relating to their deal with Fastow. In the Enron collapse, their moneymaking scheme represents a tiny drop in a vast ocean. But it is taking on huge importance for civil liberties campaigners in the UK and causing ripples of concern around Westminster.

The Enron Three, as they are known, insist that they are innocent. Remarkably, however, their guilt or innocence is not the most important facet of their case. What is most important is their possible extradition to the US under a new treaty that some lawyers and politicians claim will undermine the rights of every British citizen; a treaty that allows American law-enforcement agencies to demand that any Briton be handed over without having to present evidence that the Briton has done something wrong.

In the case of Bermingham, Mulgrew and Darby, that extradition could come within a matter of months even though their alleged crime occurred in Britain, their alleged (and so far uncomplaining) victim was a British bank and the British law-enforcement authorities have decided not to prosecute them. How can this be possible? The answer lies in the origins of both the deal and the new treaty. During the late 1990s, Bermingham, Mulgrew and Darby, who are all now aged 43, were working for NatWest’s investment banking division: an arm called Greenwich NatWest. Their work was complicated and well paid and it brought them into contact with Enron, a client which they could expect to charge £10 million a year in fees.

Mulgrew says: “We did intelligent financing. Our many clients, which included Enron, were involved in massive projects such as hydro-electric dams and power stations, often in emerging countries, and we found clever ways of attracting investment by mitigating risk.”

There was kudos to be had from working with Enron. “At the time Enron was a byword for success,” says Bermingham. In the third quarter of 2000, a year before its collapse, Enron was reporting pre-tax profits of $1.5 billion while — as we now know — hiding losses of $1 billion through creative, and illegal, accounting.

When Andrew Fastow invited the Enron Three into his deal, they listened hard. Some time earlier, NatWest and Enron had set up an offshore tax vehicle named Swap Sub in conjunction with Credit Suisse First Boston. (CSFB’s stake was the same as NatWest’s). In February 2000 Fastow telephoned Mulgrew to offer NatWest $1 million for its stake.

“It was an offshoot of another deal we had structured in which a stake of $7 million turned into $31 million in just three months,” says Mulgrew. “So NatWest had already made a fortune out of it. I was assured, and I believed, that $1 million was a fair price, so I recommended accepting the offer.” NatWest’s vehicle for investing in Swap Sub was a Cayman Islands-registered company called Campsie Ltd.

However, according to a fraud indictment signed by Thomas Hanusik, the FBI’s Enron Task Force trial attorney, dated September 2002: “Between February 2000 and August 2000, defendants David Bermingham, Giles Darby and Gary Mulgrew, and others, devised and executed a scheme to defraud NatWest and Greenwich NatWest and deprive them of money and their right to honest services by recommending to GNW that it sell its interest in Swap Sub for only $1m, when the defendants knew GNW ’s interest was worth far more, and when the defendants were planning fraudulently to convert the balance of GNW’s interest to themselves and others.”

The problem, according to prosecutors, was that after NatWest agreed to sell for just $1 million, Fastow invited the Enron Three to invest in a new company that had bought the NatWest stake. The price for coming in on the deal was $250,000. Within weeks, Fastow was on the phone congratulating the three and telling them their stake was now worth $7.3 million. And, as the prosecutors point out, while NatWest was given only $1 million, Credit Suisse First Boston, which had the same stake, was paid $10 million for its share.