Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (2770)	9/10/2003 12:18:12 AM
From: Glenn Petersen	Respond to of 3602

Enron Probe Focusing On Executives' Motives washingtonpost.com By Carrie Johnson and Peter Behr Washington Post Staff Writers Wednesday, September 10, 2003; Page E01 A Justice Department task force is preparing a critical new phase of its criminal investigation of Enron Corp., focusing on whether former executives of the Houston energy trader manipulated its profits to inflate the company's stock price and deceive investors, according to people close to the case. Prosecutors expect to gain another guilty plea today, when former Enron treasurer Ben F. Glisan Jr. appears in Houston's federal court, lawyers in the case said. Glisan was indicted in May on securities fraud and other charges, and he pleaded not guilty. But his attorney has been negotiating a change of plea with federal prosecutors. He would be the fifth, and highest-ranking, former Enron employee to admit wrongdoing. In its indictments of Glisan and former Enron chief financial officer Andrew S. Fastow, the government contended that personal greed was a driving motive in the secretive off-the-books deals they created. In other cases, prosecutors charged that executives who led the company's failed Internet broadband venture distorted its performance to win bigger bonuses. The government's case appears to be moving "beyond crimes committed against Enron to crimes committed to further Enron's objectives," said a lawyer involved in the case. But prosecutors are not yet ready to allege how far up the company's corporate ladder responsibility goes, sources said The task force is assembling evidence on a series of financial transactions it believes were meant to manipulate Enron's earnings in a number of quarterly financial reports, people close to the case said. The government is also prepared to call on former accountants at Arthur Andersen LLP who would testify that, as Enron's outside auditors, they did not approve some of the deals or that the company concealed key details of some transactions, sources said "They'll try to tell a story that these were not isolated events [and] that the Enron culture was driving this," said Houston lawyer Philip H. Hilder, who represents witnesses in the case. After Glisan and Fastow, the next key former executive in the chain of command is former chief accounting officer Richard A. Causey, who worked closely with Fastow and former chief executive Jeffery K. Skilling. No charges have been filed against Skilling or Enron founder Kenneth L. Lay, both of whom have denied wrongdoing. In the Fastow indictment, prosecutors claimed that Causey -- who was identified by title, not by name -- helped conceal Enron's deceptive ties to a private investment partnership Fastow ran called LJM. The LJM deals helped Enron conceal debt and inflate earnings, prosecutors charge. Over the next few weeks, Causey is likely to face criminal charges himself if he does not agree to provide evidence against others, according to people close to the case. Through his attorney, Causey has denied violating any laws or accounting rules at Enron. The government has indicted or filed criminal complaints against 14 former Enron executives and energy traders and against three British bankers who allegedly helped Fastow in a transaction that defrauded Enron. Four of the former employees have pleaded guilty. The others are fighting the charges. Prosecutors are also likely to file criminal charges against former Enron and Merrill Lynch & Co. executives in connection with a late 1999 sale of barges in Nigeria, a deal allegedly created by the companies to help Enron improperly boost its earnings, according to lawyers close to the investigation. The transaction allowed Enron to record $12 million in earnings and to meet analysts' expectations. In filing civil securities-fraud charges in that case, regulators allege that Fastow guaranteed Merrill it would not lose money in the deal and would find another buyer for the barges within six months. Leslie Caldwell, head of the Enron task force, said at a corporate governance conference last week that "many cases are going to be brought against people for helping other companies make their numbers." She did not specify that Enron would be among them. © 2003 The Washington Post Company