Top Enron accountant likely next for charges

HOUSTON -- Now that prosecutors have secured a guilty plea and cooperation from Enron Corp.'s former finance chief Andrew Fastow, criminal charges against the company's former top accountant won't be far behind, sources told The Associated Press.

Like Fastow, Enron's chief accounting officer Richard A. Causey answered directly to former Enron chief executives Kenneth Lay and his successor, Jeffrey Skilling.

Authorities were preparing a criminal complaint against Causey on charges stemming from the Justice Department's two-year investigation of the energy giant's collapse, people close to the investigation said last week, speaking on condition of anonymity.

But the parties involved in the guilty pleas from Fastow and his wife wanted those secured before moving on to Causey, the sources said. Snags in plea talks for Lea Fastow put any action against Causey on the back burner, the sources said this week.

With that now done, Causey could surrender as early as today, but more likely next week, the sources said.

In pleading guilty Wednesday to two counts of conspiracy to fraud, Andrew Fastow admitted that he and other senior managers fraudulently manipulated Enron's financial results and that he engaged in schemes to enrich himself at the expense of Enron's shareholders.

His indictment, handed up in October 2002, also referred to the chief accounting officer as having a secret deal with Fastow ensuring that Fastow wouldn't lose money when one of many shady partnerships he ran did business with Enron. Causey was chief accounting officer when the partnerships were operating.

Fastow accepted a 10-year prison sentence and agreed to forfeit $23.8 million in cash and property. Lea Fastow pleaded guilty to one count of filing false tax forms. She is awaiting a judge's decision on whether to accept a plea agreement that would send her to prison for five months and keep her confined at home another five months.

Mark Hulkower, one of Causey's lawyers, didn't immediately return calls for comment Thursday. Justice Department spokesman Bryan Sierra declined to comment.

Causey's proximity to the former top executives at Enron could help prosecutors build cases against Skilling and Lay if he cooperates and has incriminating information. Neither Skilling nor Lay have been charged, and both have steadfastly denied wrongdoing.

Lay's attorney, Michael Ramsey, said Thursday that his client felt a "sense of betrayal" after Wednesday's pleas by the Fastows.

"It's a betrayal of trust that's tragic in its proportions," Ramsey said. "Mr. Lay and Mr. Fastow were never fast, close personal friends. They were different generations and had different backgrounds. But so far as trust is concerned, absolutely, Andy Fastow had the trust of Ken Lay and of the board up through at least October of 2001."

A week after Enron announced devastating third-quarter losses in October 2001 -- stemming in part from what was later revealed as some of Fastow's schemes -- Lay told analysts he had confidence in Fastow. But Fastow was ousted the next day because in the intervening hours, top banks told Lay they would keep doing business with Enron only if Fastow resigned, Ramsey said.

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