Ex-Enron official weighing plea deal

HOUSTON (AP) — Former Enron Corp. finance chief Andrew Fastow is negotiating a plea bargain that could send the high-powered executive to prison for his role in the accounting scandal that brought down the energy company, sources close to the case said yesterday.

Authorities also were drawing up criminal charges against Enron’s former chief accountant, Richard A. Causey, who was expected to surrender today, the sources said on the condition of anonymity.

The exact nature of the complaint was not clear. Mr. Causey was assigned to review all Enron transactions with a partnership called LJM that was controlled by Mr. Fastow. Prosecutors say LJM was used to conduct sham transactions to fraudulently improve Enron’s books and enrich Mr. Fastow and others.

If attorneys and judges agree on the proposed plea deal with Mr. Fastow, the former executive could appear in court to change his innocent plea to guilty as early as today, the sources said. His wife, Lea, also faces charges and is negotiating an agreement.

Mr. Fastow would be the highest-ranking executive to plead guilty in the criminal investigation of Enron. The company’s collapse into bankruptcy in late 2001 was the first in a series of scandals that rattled corporate America and shook investors’ confidence in the stock market.

Mr. Fastow is said to have masterminded a complex web of schemes that hid Enron’s debt, inflated profits and allowed him to skim millions of dollars for himself, his family, and selected friends and colleagues. Prosecutors say Mr. Fastow reaped an estimated $30 million from the partnerships.

The potential plea deal raises the possibility that prosecutors are closer to bringing a case against Enron’s former top executives, Kenneth L. Lay and Jeffrey K. Skilling.

When Mr. Fastow was indicted in October 2002, his lawyers said Mr. Skilling and Mr. Lay had approved his work.

Mr. Skilling and Mr. Lay have not been charged and both maintain their innocence in the implosion that wiped out billions of investor and employee savings.

and resulted in thousands of layoffs and dozens of lawsuits.

The Houston Chronicle, citing unidentified sources, reported yesterday that federal prosecutors are offering Mr. Fastow a 10-year sentence.

If convicted, the maximum penalties for the charges against Mr. Fastow include 20 years in prison for money laundering, 10 years for securities fraud and five years each for mail fraud and conspiracy.

A plea deal for Mrs. Fastow was rejected by U.S. District Judge David Hittner yesterday that, according to the Chronicle, called for up to a 16-month prison term. The judge said the deal was too binding and that he wanted more leeway on her sentence.

It was not clear whether the rejection of that deal would have any effect on her husband’s plea deal, which will go before another judge.

Attorneys for the Fastows did not return calls seeking comment. The family’s spokesman, Gordon Andrew, declined comment.

Mr. Fastow, 42, is charged with 98 counts of fraud, money laundering, insider trading and other charges. He is free on $5 million bail pending trial scheduled for April.

Mrs. Fastow, 42, was set to go to trial Feb. 10 on six counts of conspiracy and filing false tax forms. Two hundred and fifty prospective jurors were scheduled to report to the courthouse today to answer a questionnaire to see whether they are fit to serve as jurors in her case.

Mr. Causey, 43, was fired Feb. 14, 2002, after a report by the board of directors noted his failure to properly monitor the LJM partnership that became a focal point of the fraud investigation.

Mr. Causey’s attorney, Reid Weingarten, did not return a call.