Plea Deal For Enron Exec's Wife

A federal judge tentatively accepted a plea agreement Thursday for the wife of former Enron Corp. finance chief Andrew S. Fastow, a move that could lead to a plea from Fastow and possibly his cooperation in the investigation of other top executives in the energy giant's collapse.

Under the deal, Lea Fastow, a former assistant treasurer at Enron, would go to prison for five months — a fraction of the term her husband faces but one that would not be made to overlap with his, so their children would have a parent at home.

U.S. District Court Judge David Hittner said he had "preliminary concerns" and wanted a pre-sentencing investigation to determine if the sentence was appropriate before finalizing it.

"This should make it more likely that we will now see a plea deal in the Andrew Fastow case, although it certainly doesn't guarantee that result because the charges and potential punishments in the two cases are so different," said CBS News legal analyst Andrew Cohen.

Sources close to the case said Andrew Fastow, a central figure in what prosecutors say was a web of schemes to falsely inflate Enron's profits and hide debt, was negotiating a plea deal with prosecutors that could send him to prison for 10 years and force him to pay $20 million. Earlier in the day, Fastow's attorneys huddled in the chambers of U.S. District Judge Kenneth Hoyt, who is presiding over Fastow's case.

Any deal with Fastow also could bring Enron's former top executives, Kenneth Lay and Jeffrey Skilling, closer to prosecution. Neither has been charged and both maintain their innocence.

Hittner gave attorneys until noon Friday to accept the need for a pre-sentencing report. He said he would delay Lea Fastow's trial, now scheduled for Feb. 10, for the up to 60 days it could take for a full pre-sentencing investigation by federal probation authorities. She is charged with six counts of conspiracy and filing false tax forms for allegedly participating in some of her husband's deals.

Shortly before Hittner accepted the agreement, Leslie Caldwell, head of the Justice Department's Enron Task Force, told the judge the Lea Fastow plea was part of a "global resolution of two cases of significant magnitude to the government."

She did not mention Andrew Fastow by name, although his lawyers were present in the courtroom during the arguments. A source familiar with the matter said a deal with Fastow would be contingent upon a deal for his wife. The couple has two sons, ages 8 and 4.

"She has two children at home ... and five months works. Anything more than that doesn't," said Mike DeGeurin, Lea Fastow's attorney. "It is a problem because of timing. If Andy, her husband, has to go to jail at some time, we don't want the children to be without parents. For reasons I don't want to go too much into right now, five months will work."

DeGeurin also said the plea bargain included "no agreement that Mrs. Fastow cooperate."

Andrew Fastow would be the highest-ranking executive to plead guilty in the criminal investigation of Enron. The company's collapse into bankruptcy in 2001 was the first in a series of scandals that rattled corporate America and shook investors' confidence in the stock market.

He allegedly masterminded a complex web of partnerships that hid Enron's deteriorating finances and allowed him to skim millions of dollars for himself, his family and selected friends and colleagues. Prosecutors say he reaped an estimated $30 million from the web of partnerships he set up.

Fastow, 42, is charged with fraud, money laundering, insider trading and other charges. He is free on $5 million bond pending trial scheduled for April. If convicted, the maximum penalties for the charges against him include 20 years in prison for money laundering, 10 years for securities fraud and five years each on the mail fraud and conspiracy charges.

Plea deals often involve agreements to testify against others, and the potential of a Fastow plea deal raises the possibility that prosecutors are closer to bringing a case against Lay and Skilling.

Attorneys have not said whether Fastow is willing to cooperate in prosecuting them. When Fastow was indicted in October 2002, his lawyers said Skilling and Lay approved his work.

Enron whistle-blower Sherron Watkins said Thursday that Fastow's knowledge of Enron's inner workings could crack open the case.

"Sometimes I liken Jeff Skilling to a Mafia boss who used particular words. He never said, 'Go whack Joey.' He said, 'Go take care of Joey.' And now that there have been corporate problems, he tries to say that 'I just meant, send Joey on vacation.'

"Andy's almost like the assassin who can now tell the government what his orders were or were not," Watkins told ABC's "Good Morning America."

Authorities also were preparing criminal charges against Enron's former chief accountant, Richard A. Causey, but backed off plans for him to surrender as early as Thursday, sources with knowledge of the matter told The Associated Press on condition of anonymity.

The exact nature of a complaint against Causey and when he would surrender was not immediately clear.

Causey, 43, was fired Feb. 14, 2002, after a board of directors report noted his failure to properly monitor a partnership that became a focal point of the fraud investigation. The partnership, called LJM, was devised by Andrew Fastow, and prosecutors say it was used to conduct sham transactions to fraudulently improve Enron's books and enrich Fastow and others.

Causey's lawyer, Reid Weingarten, did not return calls.