Posted on 08/26/2002 3:56:51 PM PDT by NormsRevenge
While federal prosecutors investigating Enron's collapse appear to have a clear road map laid out to criminally charge former Chief Financial Officer Andrew Fastow, they are having a tougher time pinpointing evidence that shows former Chairman and Chief Executive Officer Kenneth Lay intended to commit fraud, people familiar with the matter told The Wall Street Journal.
Both Mr. Lay and Jeffrey Skilling, who departed abruptly as chief executive in August 2001, remain focuses of the Justice Department ( news - web sites)'s investigation into the Houston energy company's demise.
Prosecutors haven't yet determined whether a strong enough case exists to bring criminal charges against either man. Barring a major investigative break, one person familiar with the matter says, "It's far from clear there's a criminal case against Kenneth Lay," and in the case of Mr. Skilling, "It's not totally clear either."
One possible avenue in Mr. Lay's case would be to charge him with illegally selling company stock based on insider information, these people say. Michael Ramsey, an attorney for Mr. Lay, called a potential insider-trading case against his client "nonexistent." As for prosecutors' decision on whether to charge Mr. Skilling, that will hinge partly on whether government investigators can obtain statements from people who directly interacted with him to show he had detailed knowledge about Enron's most problematic transactions, people familiar with the matter say. These include a series of off-the-books partnerships overseen by Mr. Fastow. An attorney for Mr. Skilling didn't return phone calls seeking comment.
Meanwhile, prosecutors have determined they intend to bring criminal charges against Mr. Fastow, these people say, but haven't decided when to bring them and what the full range of charges will be. The Justice Department's Enron Task Force identified Mr. Fastow as an unindicted co-conspirator in last week's cooperation agreement by former Enron finance executive Michael Kopper. Mr. Kopper pleaded guilty to two felony counts of money laundering and conspiracy to commit wire fraud in connection with three off-the-books partnerships overseen by Mr. Fastow. The plea deal contains no references to Messrs. Lay or Skilling. During his plea hearing Thursday, Mr. Kopper declared that he paid kickbacks to Mr. Fastow in connection with the three partnerships' activities.
The preference of government officials is to bring all potential criminal charges against Mr. Fastow in one fell swoop, rather than charging him with a narrow range of crimes relating to alleged self-dealing and then broadening their charges against him later, these people say. A Justice Department spokesman declined to comment, as did a spokesman for Mr. Fastow.
Mr. Ramsey, Mr. Lay's attorney, says Mr. Lay "had absolutely no financial connection to any of the off-balance-sheet partnerships in question" and that he hasn't "seen anything that troubled me with respect to any relationship he had with Mr. Fastow."
-- Wall Street Journal staff reporters Jonathan Weil, Alexei Barrionuevo and Kathryn Kranhold contributed to this article.
I would think it's not a case of not being able too, it's a case of not wanting too.
Lay might start talking and implicate a large segment of our big wheel legislators in some type of shenanigan behavior.
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