Southland Prosecutor Joins Probe of Enron

The top federal prosecutor in Orange County has joined the team trying to nail the two men the government believes were key figures in the collapse of Enron Corp. -- former Chief Executive Jeffrey K. Skilling and former Chairman Kenneth L. Lay.

The appointment of Assistant U.S. Atty. John Hueston to the Justice Department’s Enron Task Force follows the guilty plea last week of former Enron Chief Financial Officer Andrew S. Fastow.

“I’m coming into the Enron investigation in the wake of the Fastow plea to join the team in its pursuit to bring remaining senior managers who were complicit to justice,” Hueston said Thursday in Houston.

Neither Skilling nor Lay has been charged in connection with the 2001 collapse of the energy company, and both have repeatedly denied any wrongdoing in the accounting scandal.

Also Thursday, Enron’s former chief accounting officer, Richard A. Causey, 44, surrendered to federal authorities and pleaded not guilty to six counts of securities fraud and conspiracy.

Causey’s arrest was expected; his job title, though not his name, was mentioned in the indictment charging Fastow with fraud and other counts.

The Causey indictment accuses him of helping to engineer a massive fraud to hide Enron debt and falsely burnish its earnings. The indictment identifies Lay and Skilling by their titles and says that they as well as Fastow and Causey were “the principal managers of Enron’s finances.”

After last week’s guilty plea by Fastow, who agreed to cooperate with federal officials, Leslie Caldwell, head of the Enron Task Force, said she would vigorously pursue corruption at the highest levels of the former energy giant. The target of her intention was clear: The only two people who ranked higher at Enron than the 42-year-old Fastow were Skilling and Lay.

Privately, members of the Justice Department say the investigation is entirely geared toward Lay and Skilling. Hueston said he was not able to discuss the individual targets of his investigation.

Attorneys for Skilling and Lay didn’t return several phone messages left at their offices Wednesday and Thursday.

In three years as head of the U.S. attorney’s office in Santa Ana, Hueston carved out a reputation as an expert on fraud. Wayne Gross, Hueston’s interim replacement, said he more than doubled the office’s federal prosecutions and quadrupled wiretap and complex investigations.

Hueston, 39, also led the bribery investigation into a 10-year, $60-million trash contract in Carson that resulted in a string of indictments last year, including charges against two of the city’s former mayors and two former City Council members.

Caldwell, chief of the criminal division in the U.S. attorney’s office in San Francisco, was put in charge of the Enron Task Force in January 2002. She oversees nearly three dozen people, including Justice Department attorneys and agents from the FBI and the Internal Revenue Service.

The task force is the first company-specific investigative team created by the Justice Department.

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Reuters was used in compiling this report.