As expected, the media is all over the well-scripted direct examination of former Enron CFO Andy Fastow, although some media sources are already questioning the credibility of some of Fastow’s direct testimony.
However, given the breadth of Fastow’s direct examination, the media has not yet focused on the absolutely bizarre testimony that Fastow gave yesterday on the sad case of his wife, Lea Fastow.
The Enron Task Force prosecuted Mrs. Fastow on tax fraud charges more harshly than normal — and she endured longer and harsher punishment (one year in prison) — because of her relationship to Mr. Fastow.
In that regard, Fastow filed an affidavit in his wife’s criminal case during 2003 in which he swore that “I never, and to my knowledge and belief, Michael Kopper never, agreed or conspired with Lea Fastow to commit the crimes alleged in Counts 1 and 2 of Lea’s indictment.”
The purpose of that affidavit was to support a motion requesting that Mrs. Fastow’s trial be put off until after Mr. Fastow’s criminal trial so that Mr. Fastow could testify on his wife’s behalf without waiving his Fifth Amendment privilege against self-incrimination, although Mr. Fastow’s affidavit comes pretty darn close to waiving it, at least in regard to the tax fraud charges.
U.S. District Judge David Hittner ultimately denied that motion and scheduled the case against Mrs. Fastow to trial, which prompted both Fastows to have their plea deals with the Enron Task Force approved in May, 2004.
By that time, Mr. Fastow had been cooperating with Task Force prosecutors for since at least January, 2004 and Mrs. Fastow had withdrawn from an earlier plea deal with prosecutors after Judge Hittner had rejected it. Judge Hittner proceeded to sentence Mrs. Fastow to a year in prison, which she has completed.
With that backdrop, Fastow attempted to explain during the early afternoon portion of his testimony yesterday the statements that he made in the affidavit that he filed in his wife’s criminal case. Apparently, Fastow contends that his affidavit was technically truthful because it says that he and Kopper did not conspire with Mrs. Fastow to commit tax fraud.
Left unsaid in the affidavit is that Fastow and Kopper did conspire with each other to commit tax fraud; they just didn’t include Mrs. Fastow in that conspiracy.
So, let’s get this straight.
While cooperating with Task Force prosecutors, Fastow tells prosecutors that his wife is innocent of the tax fraud charges. Either the Task Force prosecutors did not believe him and proceeded with the criminal case against Mrs. Fastow, anyway, or the Task Force prosecutors believed him and proceeded with the criminal case against Mrs. Fastow, anyway.
If the reason that the Task Force proceeded against Mrs. Fastow is that they didn’t believe Mr. Fastow, that certainly doesn’t say much for the credibility of one of the prosecution’s key witnesses in the case against Skilling and Lay.
On the other hand, if the prosecutors believed Mr. Fastow and proceeded with the criminal case against an innocent Mrs. Fastow, anyway, that is an egregious example of the type of prosecutorial misconduct that has plagued the Task Force’s entire investigation of the Enron scandal.
Cross-examination of Mr. Fastow is going to be very interesting.
TK speculates:
If the reason that the Task Force proceeded against Mrs. Fastow is that they didn’t believe Mr. Fastow, that certainly doesn’t say much for the credibility of one of the prosecution’s key witnesses in the case against Skilling and Lay.
The Enron task force proceeded against Mrs. Fastow because she was guilty and in ugly cases the gov’t goes after friends and family.
That being said, I cannot believe the gov’t made the mistake of letting Fastow tell such BS on direct. Doing such, first, opens the gov’t to the charge of putting up of knowing false evidence. Second, it opens the possibility of the AUSAs or others involved in the prosecution of Lea being called as defense witnesses
The government should stick to its best theory–these people weren’t the best/brightest, they were a collection of lairs and con artists, whose natural inclination is to lie, whenever they get the chance–you will see this in the courtroom as the trial progresses.
What you have here is stupid advocacy–some get the bad stuff out before the defense does plan. The government should have made it clear in its opening that it vouches for nothing that any Enron employee said before they walked through the courthouse door to testify or after their direct and instead it should have been prepared on re-direct to hang Fastow with cross-examination about all the prior lies he told, including this affidavit, sticking him with multiple counts of perjury
Travails of a two-felon family
As I mentioned yesterday, Andrew Fastow’s testimony about how he misled his wife in connection with an Enron-related scheme that ultimately landed her in prison will become an area of opportunity for defense lawyers representing Jeff Skilling and Ken L…
Travails of a two-felon family
As I mentioned yesterday, Andrew Fastow’s testimony about how he misled his wife in connection with an Enron-related scheme that ultimately landed her in prison will become an area of opportunity for defense lawyers representing Jeff Skilling and Ken L…
Fastow, Skilling, Lay, Boesky and Milken
The Enron trial is heating up with Fastow’s testimony. The critical thing to keep in mind here is Lay and Skilling will be hung, if they are, by conversations about supposed guarantees. So it’s necessary to believe what Fastow is
Andy Fastow is in the house
My stars, are we already at the Andy Fastow testimony part of the Lay/Skilling trial? I knew this was progressing…
Mrs. Fastow is certainly guilty of lying to the court. The sad part of it is that according to her husband’s testimony, before he composed himself the following day, the lie was when she forcibly entered a plea deal to assure their children that one parent would be there to raise them. Also sounded like he testified that he also misled Causey yesterday- DOJ must have forgotten to drill him on the new script now that Causey pled guilty too. It appears that the prosecution played their hand very well (no compliment intended) and this no-strategy-is-too-evil phase of our justice system is simply overwhelming for anyone. They have already ruined these people and combined with the SEC, they have stripped them of their ability to ever be in a position of authority in a public company and of course they can and likely will be wiped out financially. Isn’t that sufficient without the public salivating over the sight of seeing these men in chains and see their families struggling with the loss of their husbands and fathers possibly for the rest of their lives?
This is not about justice, but about a big public win for the DOJ and they are using every weapon in their arsenal to make sure they do win and they have very many frightening weapons. In the meantime, the streets of Houston are still filled with the same number of drug dealers, child molesters, murderers all of whom can go about their illicit business never having to risk the kind of prison time that these men are facing and are likely a little safer now to go about their crimes since the DOJ budgets are going to these White Collar prosecutions.
Sorry TomK, I know you are trying to give these fellow attorneys some room to be “mistaken” but I don’t buy it. They have also lost their moral compasses and are working at “becoming heros” themselves but they are trading on lives instead of dollars. Maybe the next “smartest guys in the room” expose will be on the DOJ. No need to save me a copy but I will confess that I wouldn’t mind seeing those “perp walks”.
without the public salivating over the sight of seeing these men in chains . .
those of us who buy into deterrence don’t accept this view. Skilling has $200 + million that he stole; there are some great opinions out there on the need to make WCC unprofitable, which means a long sentence, a big fine, and lots of restitution for Skilling hopefully is left to come
The way these prosecutions are being conducted has nothing to do with truth, justice and certain and proportional punishments. That is deterrence to the “rational” criminal and deterrence assumes criminals are “rational”. Anyone should recognize that for an educated professional who has worked for decades as a respected business person; that losing their money, reputation, their ability to earn a living for their families and being “ousted” publicly as a criminal are very strong deterrences. So why is the DOJ so afraid to let everyone speak (rather than claim 100 unnamed and unindicted co-conspirators) and out of fairness and a commitment to truth, just let the chips fall where they may? This is a game for the prosecution and they are reigning in people who are innocent of crimes and too soft headed to know the only way to maintain your freedom once accused is to claim you are a criminal. There is no equal access to the truth in this system- it is processed and manipulated and controlled by the DOJ. This is all a big spectacle for public consumption and it is extreme and it is cruel.
I’ve been following this case. And I’ve read two of the Enron books and know people who were in the middle of the company. The Sarbanes-Oxley (SOX)law passed by Congress in 2002 actually shows that Skilling and Lay are not responsible for the hidden deals, conflicts of interest and pumped up financials. The SOX regulations are forcing compliance on the finance and IT departments of public companies. This federal trial is a farce for the kind of audience Jay Leno talks to on his Jay Walk segments.
I’ve also followed this case. but I read two of the Enron books and know people who were in the middle of the company.