The wife of Enron's former finance chief misses a deadline to accept a plea agreement, but her lawyer says talks are continuing.
By Associated Press
Published January 10, 2004
HOUSTON - A judge moved ahead with trial plans Friday for the wife of former Enron finance chief Andrew Fastow after the deadline for her to accept his conditions on a plea deal passed. But her attorney said negotiations would continue through the weekend to try to salvage an agreement.
Without a deal for Lea Fastow, a separate plea agreement for Andrew Fastow seemed unlikely, which could hinder the government's investigation of other executives from the failed energy giant, most notably former top executives Kenneth Lay and Jeffrey Skilling.
U.S. District Judge David Hittner said Thursday he would accept a plea of guilty to a single tax violation from Lea Fastow, a former assistant treasurer at Enron, but balked at being bound to a five-month prison sentence. He reserved the right to determine a sentence he deemed appropriate after federal probation authorities conducted a sentencing investigation.
Mike DeGeurin, Lea Fastow's attorney, said he and prosecutors "are working on a reasonable resolution that will benefit both parties."
"It's not right. It's not ready," DeGeurin said outside the federal courthouse. "All the details have not been worked out. Nor has it been presented in a way for the judge to approve it. We're still in the process of that."
A conviction on a single federal tax count normally carries a range of 10 months to three years in prison, Hittner said.
DeGeurin has said the five-month sentence for Lea Fastow was key to both plea negotiations because the Fastows have two young sons, ages 4 and 8, and want to ensure that at least one parent is at home for them.
Hittner gave Lea Fastow until noon Friday to decide whether to accept the plea agreement. After the deadline passed, the judge issued a statement saying Lea Fastow failed to advise the court of her "willingness to receive a plea of guilty" under his conditions, and her trial would go ahead as scheduled Feb. 10.
"We're a little disappointed," said Leslie Caldwell, head of the Justice Department task force investigating the Enron collapse, as she left the courthouse for a Houston airport. She did not elaborate.
Hittner said Lea Fastow's attorneys and prosecutors will be given copies of questionnaires filled out by potential jurors Friday. They must produce lists of which jurors they want to eliminate by Wednesday.
Andrew Fastow, who prosecutors say arranged a web of schemes to enrich himself and others while inflating Enron's profits and hiding company debt, was negotiating a plea deal that could include 10 years in prison and a fine of at least $20-million, the Associated Press said, quoting sources close to the case.
Andrew Fastow's attorneys haven't said whether he will cooperate with investigators, but a guilty plea from him would be a significant break in the Justice Department's two-year investigation into Enron's 2001 collapse.
John Keker, Andrew Fastow's lead attorney, who attended a hearing in Lea Fastow's case Thursday, had checked out of a downtown Houston hotel by midday Friday.
Justice Department spokesman Bryan Sierra said the investigation will continue with or without plea deals with the Fastows.
Neither Lay nor Skilling has been charged, and both maintain their innocence.
"Nothing changes as to our firm belief that an objective fact-finder would conclude that Mr. Skilling did not do anything wrong," Bruce Hiler, Skilling's attorney, said Friday.
Mike Ramsey, Lay's attorney, said Lay has no worries if Fastow tells the truth.
Andrew Fastow faces 98 counts, including fraud, money laundering, conspiracy and insider trading. Lea Fastow is charged with six counts of conspiracy and filing false tax forms. She is accused of participating in some of her husband's deals and failing to report income.
The Fastows, both 42, are free on bond - $5-million for him, $500,000 for her. His trial is set for April. A ruling from the judge in his case on a request from his legal team to move Andrew Fastow's trial out of Houston and preferably out of Texas is pending.
