Fraud and Deceit – Enron's Criminals

Facing 25 years in jail, Enron's former chief executive officer, Jeffrey Skilling, and former Chairman Kenneth Lay sat in court today listening to their former Chief Financial Officer, Andrew Fastow, describe how they were totally complicit in Enron's financial deceptions and collapse, ultimately costing investors $25B and 5,000 employees the loss of their jobs. Thinking they were above the law, untouchable, and near omnipotent, these slimy friends of Bush manipulated markets and defrauded electricity consumers with billions of dollars in overcharges and the intentional creation of false power shortages. These phony crisis's rippled through the economy causing unnecessary cost increases as companies had to invest in electrical power safeguards such as emergency power supplies and protection devices that would allow them to 'weather the shortages'.

Fastow testified today that his boss, Jeffrey Skilling, told him to use off-the-books partnerships to ``give me all the juice you can'' on earnings.

Fastow said the Enron board approved his creation of the partnerships, called LJM1 and LJM2, and that his participation in them had to be approved by Lay, 63, and Skilling, 52, under the company's code of conduct. The official purposes of the partnerships were to do quick transactions and avoid investment banking fees, Fastow said before the trial. Fastow admitted using the partnerships to hide billions of dollars in Enron debt.

``The whole purpose of the partnership was to make Enron's numbers look the way they wanted them to look,'' Fastow testified about one of the entities. ``Skilling made it clear that he wanted someone to run this partnership that would work with Enron in the future in a cooperative way.''

Prosecutors told jurors in opening arguments of the trial that Lay and Skilling manipulated earnings through deals with Fastow's partnerships and deceived investors about the finances of Enron, once the seventh-largest U.S. company by sales. In January 2004, Fastow admitted engaging in securities fraud and agreed to forfeit $29 million in cash and assets.

Posted on The Human Stain