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Fastow: No proof of deals with Skilling
(AP)
Updated: 2006-03-10 15:00
"I can't recall any specific document," Fastow answered.
Petrocelli also tore at the Global Galactic's authenticity.
First, he noted that even though Fastow said he destroyed the original in the
summer of 2001, a copy that Causey refused to keep ended up in an envelope in a
safe-deposit box that Fastow and his wife kept at a bank. Fastow said he had no
idea how it ended up in a folder holding his Enron employment agreement.
His wife, Lea, found the envelope when she checked the safe-deposit box in
April 2004 錕斤拷 the same month that she pleaded guilty to a misdemeanor tax crime
for helping Fastow hide ill-gotten gains and that prosecutors dropped six felony
counts pending against her.
Fastow said his wife put the envelope on his desk, but he didn't look inside
the folder until about a month later. He immediately gave it to his attorney,
who gave it to the government, Fastow said.
Petrocelli also noted an ambitious effort at Enron in early 2000 to sell all
of its international assets, including the Brazilian plant and the barges, for
$7 billion. The attorney showed an internal Enron memorandum that noted the
energy company needed to repurchase those assets from LJM in order to sell them,
which would have negated any reason for the side deals. The effort, dubbed
Project Summer, never materialized.
"I don't know what was happening here," Fastow said. "I did know Enron would
take us out."
"Its origin is suspicious," Petrocelli said outside of court about the Global
Galactic. "It's not proof of anything against Mr. Skilling."
Enron ended up repurchasing the Brazilian plant in 2001.
The barges were central in the 2004 convictions at the trial of four former
Merrill Lynch & Co. executives and a former midlevel Enron executive. They
are serving prison terms for helping push through a sham deal to sell the barges
to the brokerage in late 1999 so Enron could appear to have made earnings
targets.
Fastow testified Thursday that he promised Merrill Lynch that the brokerage
would be bought out at a premium in a verbal side deal. LJM2 came through and
bought the barges on schedule at a premium.
"I did that largely based on my understanding that LJM2 would have a similar
guarantee from Mr. Skilling that it would be taken out in the future if
necessary without a loss and its rate of return," Fastow said.
But he conceded he didn't remember telling anyone that he made the deal
because of Skilling's assurances.
Enron sold those barges plus another six to AES Corp. later in 2000.
Skilling, who was CEO for six months until resigning in August 2001, faces 31
counts of fraud, conspiracy, insider trading and lying to auditors. Lay, who
resumed his role as CEO after Skilling's abrupt departure, faces seven counts of
fraud and conspiracy.
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