Enron executive pleads guilty and pays $8m
David Teather in New York
Friday October 31, 2003
The Guardian
Investigations into the collapse of Enron appeared to be gaining
momentum yesterday when officials charged a former senior
executive with allegedly helping to falsify the energy firm's
earnings statements.
David Delainey, who had
been chief executive of
Enron North America and
Enron Energy Services,
entered a guilty plea to
criminal charges brought by
the US justice department.
He also settled allegations
made by the securities and
exchange commission
(SEC).
He is paying $8m (£5m) in
penalties and disgorgement of profits he made on the sale of
shares in the company during the time in question. He was due
to appear in a Houston court later in the day.
Mr Delainey is one of the most senior former Enron executives
to be charged for the alleged manipulation of the Houston-based
firm's books, which hid large debts and tilted the company into
bankruptcy almost two years ago.
Prosecutors will regard Mr Delainey as a significant catch. He
has agreed to cooperate with the government's investigation and
could prove a crucial witness in securing cases against
executives. Prosecutors have brought charges against 24 people
stemming from the company's failure.
The SEC said Mr Delainey had engaged in a "wide-ranging
scheme to manipulate Enron's publicly reported earnings... to
produce materially false and misleading financial results".
It further alleged that he profited from the manipulation of the
books by insider trading, reaping "millions of dollars in profits".
He was specifically accused of shifting money around to hide
bad debts. He was also implicated in the notorious deal involving
the 'sale' of energy barges in Nigeria to Merrill Lynch in 1999 to
ensure the company met its targets. The sale, it has since
emerged, was actually a loan.
The US public has grown impatient at the slow pace of the
investigation into the scandal, but recent evidence suggests that
prosecutors are starting to make progress.
Last month, three former Merrill Lynch bankers were charged
with criminal conspiracy in the Nigerian episode, and the
one-time Enron treasurer, Ben Glisan, became the first person
to be jailed after pleading guilty to conspiracy.
The most senior official to face charges so far is the erstwhile
finance chief, Andrew Fastow.
guardian.co.uk |
