Jun 7, 2004
Prosecutors in the first big Enron fraud trial are already backpedaling. Former Chief Financial Officer Andrew Fastow, the major witness in the case, will not be taking the stand for them after all.
The case involves a scheme where Enron sold financial interests in worthless Nigerian power barges to Merrill Lynch, with the promise to buy them back six months later. That allowed Enron to report 12 million dollars in phony profits, with no risk taken by Merrill Lynch. Six low-level executives are on trial – four from Merrill Lynch, and two from Enron.
Fastow pled guilty of fraud last year, getting a light sentence in exchange for his cooperation in this and other Enron fraud cases.
Prosecutors now say, however, that Fastow worded his statements carefully enough that they leave "reasonable doubt" of intent to defraud. So they can't use his testimony.
This case was supposed to be the easiest of the Enron prosecutions. If the prosecutors are raising doubts now, what does that mean about their cases against higher executives like Jeffrey Skilling and Richard Causey?
Not to mention Ken Lay, whom they haven't even bothered to charge.
Enron executives ripped off Enron workers and the public, but they'll get away free – supposedly because they worded their scheme in just the right way.
If you're rich enough, the technicalities to get you off are big enough to drive a money truck through!