Silent Partner: Andy Fastow Had the World at His Feet. After Enron, It's at His Throat.
By Mark Leibovich
Washington Post Staff Writer
Monday, September 30, 2002;
Page C01
HOUSTON
What does Andy Fastow do
all day?
He watches a lot of
television. He follows
what's said about him with
car-wreck fascination,
friends and associates say.
He is transfixed by the
morning shows, cable news
and financial wrap-ups. He
is, by turns, angry, amused
and resigned. People close
to Fastow have advised him
to stop watching, and
sometimes he'll impose a
blackout, but it doesn't
last.
One of corporate America's
most reviled figures has
time on his hands. He's
been unemployed since
being ousted as Enron's
chief financial officer a year
ago. Now he spends time
with his wife, Lea, and two
young sons at their home
in the fashionable Houston
enclave of Southampton
Place. His 3-year-old is
safely unaware of what's
happening. But the
7-year-old may be old
enough to understand -- if
anyone can understand -- why security guards are
stationed outside the house, why cameramen come onto
the lawn and why a New York Times reporter attended his
Tadpole League baseball game to watch his father, an
American pariah, coach third base.
Andrew Stuart Fastow, 40, is the main target of the
investigation into Enron's stunning collapse, the alleged
mastermind of the off-balance-sheet partnerships that
sank the world's seventh-biggest corporation into
bankruptcy. He enriched himself by tens of millions. The
Justice Department and the SEC are closing in. He could
be criminally charged any day.
Fastow has stayed invisible and quiet with a vengeance. He
declined to be interviewed for this story, just as he always
declines -- through his spokesman, Gordon G. Andrew -- to
be interviewed for all stories. Fastow has said nothing
publicly except for a few sentences before a House
subcommittee in February. "I would like to answer the
committee's questions," Fastow said, looking boyish,
nervous and sleep-deprived. "But on the advice of my
counsel, I respectfully decline to answer the questions
based on the protection afforded me under the
Constitution of the United States."
Fastow's only other public appearance came last December
when his lawyer -- then David Boies -- called a news
conference to dispel a rumor that he had fled the country.
His current attorney, John W. Keker, a former special
prosecutor during the Iran-contra scandal, has also said
nothing, although he did respond to a query for this article
about his -- and Fastow's -- silence. "The proper place to
confront liars, not-for-attribution whisperers, responsibility
dodgers, and the 'I had no idea' types is in the courtroom;
not in the media," Keker wrote in an e-mail. "The media
these days is so clogged reporting on the charlatans, that
truth won't be heard."
Fastow's silence has created a vacuum that's been filled
with damning documents, videotapes, public testimony
and terrible press. They portray a brash and greedy
schemer, a table-pounder in meetings, a "prickly guy that
would tell you everything wrong about others and
everything right about himself," former CEO Jeffrey
Skilling told lawyers investigating the case for the
company's board of directors.
"There is zero sympathy for the guy down here," says Tom
Cunningham, a Houston lawyer who has worked on cases
for and against Enron. "Most people are just waiting for
him to go to jail."
And yet Fastow has become an almost mythic subject, to a
point where the trivia of his day-to-day life has become an
odd curiosity. His rabbi -- Shaul Osadchey of Congregation
Or Ami in Houston -- is a media star, repeatedly defending
Fastow and dubbing him a mensch. There was a recent
Fastow sighting at Benjy's, a restaurant near his home,
where it was reported -- by the Houston Chronicle -- that
he ordered chocolate cake.
Mr. Mystery
Among the top Enron executives implicated in the scandal,
Fastow might be the most mysterious figure. The others --
Skilling and longtime CEO Ken Lay -- have at least
mustered shows of unbowed spirit, if not defiance. Skilling
was one of the few Enron executives who didn't invoke
their Fifth Amendment privilege on Capitol Hill. Lay, who
along with his wife, Linda, was interviewed by Lisa Myers
on NBC last winter, has partly resumed his
man-about-Houston regimen on the charity, social and
cultural circuit.
Fastow no longer speaks to Skilling, or Lay, or his former
lieutenant, Michael Kopper, who pleaded guilty last month
to charges that he helped build the partnerships that
disguised Enron's crumbling business and funneled
millions to himself, Fastow and others.
Fastow sees few people except for about six friends and his
immediate family, which includes his parents, Carl and
Joan Fastow. Late last year, shortly after the Enron
scandal come to light, Carl and Joan moved from New
Jersey to Houston to be closer to their son. They now live
in a house in Southampton that Andy purchased for them,
the former home of Michael Kopper.
Andy Fastow keeps an office at an undisclosed locale in
downtown Houston. There, he sends and reads e-mail,
talks to his lawyers and -- inevitably -- studies articles
about himself online.
He reads a rehashed account of an incident that took place
in Chicago 17 years ago. Fastow, who was attending
Northwestern's Kellogg School of Management, became
involved in a dispute with a cabdriver over change. The
cabby, who previously had been suspended 14 times,
threw a punch and was suspended again.
Like the taxi driver, others on the far peripheries of
Fastow's life have gained footnote fame. "I was a skinny
little girl and Andy used to call me Gumby," says Lori
Redunski, who was a childhood neighbor of Fastow's and
now lives in Austin. He wasn't a bad kid, she says. But his
circumstances have stirred a rush of e-mail traffic among
his former peers. Above all, Fastow is a celebrity, which
carries its own cachet. "I have a friend who went to high
school with that actor Ray Liotta," Redunski says. "But I
get to say I grew up with Andy Fastow."
Shortly after the Enron story broke, Fastow was dining
alone in a restaurant in New York and struck up a
conversation with a man from Milwaukee. Fastow told him
who he was and where he'd worked. "I just saw Yoko Ono
here 20 minutes ago," the man told Fastow, who has
recounted the story to friends. "But this tops Yoko."
Empty Symbol
The Enron calamity is now entrenched as Houston's civic
signature. Even casual watchers of the scandal here can
recite the names of its key figures, their presumed rap
sheets -- and in many cases, exactly where they live (as if
they sold Hollywood-style maps). Curious visitors file into
the luxury thrift shop -- Jus' Stuff -- from which Linda Lay
is hawking the leftover contents from the vacation homes
she and Ken are unloading -- the odd bronze goat ($700),
painted horse ($3,600) or Charles Barkley jersey ($380).
Tourists get their pictures taken next to the silver tilted "E"
sculptures outside Enron's largely empty downtown offices.
One tilted E sign sold for $44,000 on Wednesday in an
auction of Enron surplus items. "Yesterday I took a British
lady here from her hotel and back," says Oliver Egenti, a
Houston cabdriver sitting in his taxi outside the
headquarters. "She got out of the car, took a picture and
we left." He earned $44.
Within the lineup of Enron's key players, little about
Fastow seems extraordinary except the accusations against
him. He was born in the Washington area, the middle of
three sons. He spent his early years in Northern Virginia
and Long Island before his family moved to the comfortable
New York suburb of New Providence, N.J. His father
worked in merchandising for a drugstore chain. He met
Lea Weingarten, the daughter of a former Miss Israel, while
he attended Tufts University. He smoked a pipe when he
returned home from college, recalled Anne Dillman, a
member of the New Jersey state school board who knew
Fastow when he served as student representative to the
board in 1980. "I wish him well," Dillman says in an
interview, adding that she is "very disappointed" in him.
Today, Fastow jogs around Rice University, near his home.
He plays tennis, frequents Starbucks, belongs to a country
club and takes his sons fishing on his 18-foot Boston
Whaler. He has a home in Galveston, close to Lay's (they
share the same media-weary caretaker), and a cabin on 68
acres in Norwich, Vt. He has a Porsche 911 and a
Mercedes-Benz E320 wagon and contributed $1,000 to the
George W. Bush for President campaign.
Until recently, Fastow could often be seen at the site of the
11,493-square-foot mansion he was building in River Oaks,
Houston's most exclusive area. It is a neighborhood of big
lawns, wrought-iron security gates and a roster of Enron's
elite that includes Lay and Skilling.
Fastow's move to River Oaks was a milestone of his
self-made success. Lea Fastow comes from a wealthy
Houston family, and one of the popular theories to explain
Fastow's alleged greed is that he was desperate to show
that he could "succeed on his own."
Fastow was proud of his new home and he monitored its
construction closely, according to a source involved with
the project. The three-story house at 3005 Del Monte Ave.
features six fireplaces, Italian blue flagstone flooring, a
limestone exterior, a slate roof and a three-car garage. It is
nearly finished.
But the Fastows won't move in. They will stay in their
current home, figuring the family has endured enough
upheaval. The River Oaks property is on the market, for
$4.3 million, and the federal government -- which has
frozen an estimated $23 million in assets held by Fastow
and his associates -- will likely keep the proceeds. There
are mounds of dirt in front, a "No Trespassing" sign on a
cyclone fence, and a boxy wooden structure that houses
the toilets for the construction workers. (Porta-johns are
not permitted in River Oaks.)
There are big A-frame windows and no drapes. Pedestrians
can see from Del Monte Avenue through to the pool and
whirlpool on the back patio. "There is no more work being
done on that house, and that gives me great satisfaction,"
Mary Bain Pearson, a 70-year-old Enron shareholder from
Houston, told a Senate panel. The room filled with
applause.
"This house is a big symbol," says Tom Leishman, a
subcontractor who worked on the mansion. "It's a symbol
that you can live the American dream, but you can't rape
it." Leishman has stopped by to pick up some equipment.
He is sitting in his white Ford pickup in front of the home,
which he calls "a monstrosity." His job was to haul garbage
away.
The Family Guy
Fastow stays bunkered at his large red brick home in
Southampton Place, about a mile away. There are toys in
the yard and an American flag hanging from a balcony over
the front door. The flag is huge, almost car-dealership size.
It went up after Sept. 11. Fastow used to speak of his
appreciation for the American way, especially as it related
to capitalism, opportunity and financial reward. Now, he
complains to friends about how the American promise of
"innocent until proven guilty" has been perverted in his
case. He has railed about how he's been treated unfairly
by Lay and Skilling, by opposing lawyers, by the media, by
the community. He was a victim of a power struggle at
Enron and has maintained -- through Gordon Andrew --
that he acted with the full knowledge of the company's top
executives, board of directors and auditors.
Fastow is eager to correct the record and explain himself, if
only because his boys will be old enough to be curious one
day. He consults with Andrew, a public relations veteran in
Princeton, N.J., who is a former head of corporate
communications for Citigroup, and its CEO, Sandy Weill.
Jail terrifies Fastow more than anything, he has told
people close to him, and avoiding it is far more important
than trying to salvage his image.
He thinks of his boys growing up without him. "Fastow's
devotion to his family is accepted by anyone who knows
him," says David Berg, a Houston attorney who has been
involved in suits against Enron. In the accounts of
strip-clubbing and bosses marrying their secretaries that
marked Enron's heyday, Fastow's name is absent.
He is a family man, even his accusers say, but it's difficult
to unstick the goo that connects Fastow's loved ones to the
accusations against him. Indeed, Fastow named two of his
partnerships for the first initials of his wife and boys --
LJM and LJM2 -- and another one after his neighborhood
-- Southampton.
Kopper's plea agreement includes several references to
Fastow siphoning money from the partnerships to benefit
members of his family. Lea Fastow -- a former Enron
finance employee -- could also be in legal trouble. The
Justice Department alleges that the couple received at
least $17 million in illegally gained cash from the
partnerships, according to court papers filed in Kopper's
plea deal.
Does a family man embroil his family in something like
this? "There are a lot of hard lessons here," says Tom
Cunningham. "But Andy Fastow has gone horribly wrong
and something needs to be done."
"It's not our fault if he ruined his kids' lives," adds
Leishman, the waste services contractor.
Members of Congress deride him as "Fast Andy Fastow"
and the "Betty Crocker of cooked books." He receives death
threats and sees anti-Semitic postings about himself on
Internet message boards. He burrows into his legal
strategy and drives his kids to school, obsesses on the
small details of his past and contemplates black holes in
his future.
His flag-draped house is a temporary sanctuary, just as the
aborted mansion in River Oaks has become an icon of
Enron's rash ambitions. It is an empty shell of grand plans.
Like Andy Fastow, it sits there, exposed and in limbo.
© 2002 The Washington Post Company
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