More Trials of Enron Execs to Get Underway Next Year
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 highflying energy company, which filed for Chapter 11 bankruptcy protection in December 2001.
The two top executives, former Chairman Kenneth L. Lay and former Chief Executive Jeffrey K. 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 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 S. Fastow, are scheduled for trial in 2004. The 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 an attorney 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.”
The first Enron defendant to face a jury is expected to be Lea Fastow, a onetime Enron executive and wife of the former finance chief. She is scheduled for trial Feb. 10.
Lea 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 allegedly participating in some of her husband’s deals.
Andrew Fastow is the highest-profile former Enron executive bound for trial, which is set to begin in April, although his lawyers plan to ask for a postponement. They also are awaiting word on whether a judge will move his case outside Texas.
Fastow 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 that funneled millions to him, his family and others and set Enron on a collision course for failure.
In June, four former Merrill Lynch & Co. bankers and two former mid-level 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.
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 alleging 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.
John M. Forney, a former top trading executive, also is facing 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 2000-01.
