- The Washington Times - Friday, December 26, 2003

HOUSTON — First came Enron Corp.’s scandalous collapse. Then came the crackdowns. Now come the trials.

The Enron saga has brought the infamous and the unknown to court in handcuffs as the Justice Department continues a multilayered probe into what brought down the high-flying energy company.

The two top executives, former Chairman Kenneth Lay and former Chief Executive Jeffrey Skilling, had not been charged as the investigation passed the two-year mark. Both maintain their innocence of wrongdoing in the corporate implosion that cost thousands of workers their jobs, burned many investors and spawned dozens of lawsuits.

Barring last-minute guilty pleas or lengthy postponements, 16 defendants, including former Chief Financial Officer Andrew Fastow, are scheduled for trial in 2004. The five jury trials are likely to mix intense drama with complicated testimony.

“As much activity as there has been so far, it’s really just a warm-up act to what we can expect in the coming year,” said Robert Mintz, a former federal prosecutor who handles white-collar crime cases as a lawyer in private practice.

“The government will truly be put to the test in these upcoming trials, and we will see for the first time whether the government can successfully distill these incredibly complex frauds into cases jurors can understand,” Mr. Mintz said.

The first Enron defendant to face a jury is expected to be Lea Fastow, a one-time Enron executive and wife of the former finance chief. She is scheduled for trial Feb. 10, and the judge has already denied a defense request to move the trial.

Mrs. Fastow, who quit as Enron’s assistant treasurer in 1997, was indicted in April on six counts of conspiracy and filing false tax forms for reputedly participating in some of her husband’s deals.

Mr. Fastow is the highest-profile former Enron executive bound for trial in April, though his lawyers plan to ask for a postponement. They also are awaiting word on whether a judge will move his case outside Texas.

He faces 98 counts of conspiracy, fraud, money laundering, insider trading and other charges. He’s accused of running a mini-kingdom of Byzantine financing methods and partnerships for years that funneled millions to him, his family and others and set the company on a collision course for failure.

Mr. Fastow was indicted in October 2002, more than two months after his former top lieutenant, Michael Kopper, spilled all to prosecutors about reputed dirty deals in Enron’s secretive finance group.

His lawyers say he did what he was hired for, and his work was approved by Enron’s top executives — Mr. Lay and Mr. Skilling — as well as the company’s directors. Mrs. Fastow’s lawyers say she was indicted to try to squeeze cooperation out of her husband.

In June, four former Merrill Lynch & Co. bankers and two former midlevel Enron executives are scheduled to go to trial on conspiracy charges. They’re accused of pushing through a loan disguised as a sale of Nigerian barges in 1999 so Enron would appear to have met lofty earnings targets. All six have pleaded not guilty.

The 2004 trials on the docket so far are scheduled to end with two in October. Seven former Enron Broadband executives were named in a 223-count indictment charging three conspiracies: Overstatement of capabilities of the company’s broadband unit, accounting fraud and efforts to hype broadband to analysts in 2001 to boost Enron’s stock price.

All pleaded not guilty, and their lawyers say the case may be split into two or more separate trials because of the different types of conspiracies charged in the indictment.

John Forney, a former top trading executive at Enron, is scheduled for trial in San Francisco — so far the only trial scheduled outside of Houston, where Enron is based — on 11 counts of conspiracy and fraud. He’s accused of manipulating Western energy markets during California’s power crisis of 2000 and 2001. He too has pleaded not guilty.

Besides Mr. Kopper, six persons have struck plea deals — five former Enron executives and David Duncan, who was the top Enron auditor at nearly defunct Arthur Andersen LLP.

All six are cooperating with prosecutors in the upcoming trials and other ongoing investigations except former Treasurer Ben Glisan, who began serving a five-year sentence in September after pleading guilty to conspiracy. He will turn 38 in prison next month.

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