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Target: Enron
By KRIS HUNDLEY, Times Staff Writer Joe Ford, the FBI agent who led the massive health care fraud investigation into the hospital chain HCA Inc. in the 1990s, has another target in his sights: Enron Corp. And former colleagues as well as attorneys on both sides of the HCA case say the decision to put Ford in charge of the FBI's Enron investigation in Houston was a wise one. "He's smart, he works hard and he's not afraid," said Bill Jung, a Tampa attorney who represented one of four hospital executives charged with Medicare fraud as a result of Ford's far-ranging HCA investigation. "My take on Joe is that he's a superb agent." Ford, 45, has been agent in charge of the FBI's investigation into Enron since mid January, overseeing the work of about 30 agents. He left the Tampa office two years ago for Washington, taking with him his new wife and assistant U.S. attorney on the HCA case, Kathleen Haley. (Haley is now an attorney with the Securities and Exchange Commission.) At FBI headquarters, Ford served as head of the agency's economic crimes unit. After Sept. 11, he helped organize a group investigating the financing of terrorism. The Enron assignment came on the day Ford was supposed to transfer to a post as chief of the FBI's white-collar crime division in New York City. It followed several months of apparent disarray among federal investigators and politicans as they chased the rapidly disintegrating oil and gas behemoth, which declared bankruptcy in December. Since Ford took the helm in Houston, his task force has been involved in the government's successful prosecution of Enron's accounting firm, Arthur Andersen, in June after a guilty plea by Enron's chief auditor at Andersen, David Duncan. Last week there was further movement on the case as Michael Kopper, a former Enron finance executive, agreed to plead guilty to at least two felonies and said he would cooperate with the inquiry. Ford, who was a silent presence during the HCA trial in Tampa three years ago, declined to comment on the FBI's investigation into Enron or his role in it. But people familiar with his background said the slow but steady nature of the Enron investigation reflects Ford's dogged determination and extraordinary attention to detail. Jung recalled that in the HCA case, the government had amassed thousands of company documents that filled a storage room in Tampa to support their indictments against four executives. By the time defense attorneys got a look at the documents, Ford and his team had already been through them with a fine-toothed comb. "I'd tell the defense attorneys in Enron that Joe Ford will know that paper trail cold," Jung said. "He will get there first and he won't miss a thing." Ford joined the FBI in 1977 after graduating from the University of Baltimore. By the early 1990s, he was in Washington, coordinating the FBI's medical fraud task force and working with Congress to ensure enforcement provisions were part of major health care legislation. In 1994, he transferred to Fort Myers, where he began to hear from whistleblowers about questionable accounting at the fast-growing hospital chain then known as Columbia. Stephen Meagher, attorney for former Columbia employee John Schilling, went to Ford in 1996 with his client's complaint that the hospital company was routinely overbilling Medicare. Schilling's lawsuit, which is still pending, became one of the foundations for a sweeping, multistate government raid at 35 Columbia facilities in July 1997. The 74-page affidavit supporting the searches was signed by Ford. "Organizing the various tentacles to make that significant a strike and to make it a surprise evidences a fair amount of skill and determination," said Meagher, who has known Ford since 1993. "Joe is both skilled at and prone to running large and far-flung investigations. I think Enron is right up his alley." Ford was slammed as a bully by officials at HCA for arresting one hospital executive at his dinner table and taking him away from his kids in handcuffs. But Jung said when his client turned himself in to authorities several months later, Ford promised to keep the arrest low-key and kept his word. "That goes a long way," said Jung, who said the FBI and federal prosecutors continued to act honorably throughout the eight-week-long trial. "There's a lot of banging around at trial, but I never saw a piece of paper that should have been turned in and wasn't. And I never saw Joe fib or twist the truth." Jung and others say there are obvious similarities between the two cases. Both involve major organizational challenges. Both focus on complex accounting irregularities which Ford, an accountant, is well-trained to unravel. Just as the Columbia case included allegations, which are still pending, that the hospital paid kickbacks to doctors, Enron's Kopper is alleging that he gave chief financial officer Andrew Fastow money from a partnership that was used to help the company hide debt and pump up profits. "It's a Joe Ford tactic to focus on the financial relationships between individuals," Meagher said. "It's a productive way to look at these things, and it's an easier thing for a jury to understand than these subterranean funds and arcane accounting intricacies." Al Robinson, former agent in charge of the FBI office in Tampa, said Ford understands that the key to a good investigation is keeping in mind how the case will play out at trial. "Top investigators like Joe understand how to manipulate accounting issues," said Robinson, who worked with Ford both in Tampa and earlier in San Antonio, Texas. "But you've got to deal with the reality of how to present the case in court. And on a complicated accounting case, it's critical that you have someone on the inside who can tell the story." Ford's success with the HCA investigation was mixed. Despite pressure on the indicted executives, prosecutors were unable to get them to implicate people further up the management chain. The jury failed to reach a verdict on Jung's client, Carl Lynn Dick, and another defendant was acquitted. Though the jury found two defendants, Jay Jarrell and Robert Whiteside, guilty of Medicare fraud, their convictions were overturned by the appellate court in March. Charles Lembcke, Whiteside's attorney, said Ford's mistake in the HCA trial was trying to force a connection to the top of the company that didn't exist. "The government grabbed onto the wrong issue and spent all their efforts trying to prove that's how it ought to be," he said. "The people charged were with an isolated unit of the company. It will be a lot different in Enron if he's got Fastow's assistant." Despite the reversal of individual convictions, the HCA investigation, which officially ended in July, had a major impact on the company and the health care industry. Soon after the 1997 FBI raids on its hospitals, the company replaced its top management, put the brakes on its expansion and adopted a new conciliatory tone toward the government. That resulted in the company pleading guilty to criminal charges and paying $840-million in fines in 2000 to settle most civil charges. "While it may have been frustrating for Joe that there weren't more convictions, he did negotiate a fairly extensive guilty plea and fine by the company," said Meagher, who continues to be involved in settlement talks involving the government and HCA on Schilling's complaint. "Joe was not only very involved in the negotiations, but he was responsible for marshalling the evidence, which was a monumental task." Ford's former boss said despite the public's perception that the Enron prosecution is proceeding slowly, much is going on behind the scenes. "It's not like a bank robbery where you know a crime has been committed and you just have to figure out who did it," said Robinson, who retired from the FBI five years ago. "In white-collar crime, you know who did it and you've got to prove what they did was illegal. And there's a very fine line between criminal intent and a bad business decision. You have to show criminal intent, and it's not easy. But Joe is certainly eminently qualified." -- Times researchers Kitty Bennett and Cathy Wos contributed to this report, which used information from Times wires. Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.
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From the Times Business report
From the AP
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