Fastow Testifies Lay Knew of Enron's 'Serious Problems'

[UpInArms]

http://www.nytimes.com/2006/03/08/business/businessspecial3/08cnd-enron.html?ex=1142485200&en=e7f34d908caf1ca7&ei=5099&partner=TOPIXNEWS

HOUSTON, March 8 —Kenneth L. Lay was well aware of the Enron's precarious state in 2001 even as he deflected increasingly tough questions about the company's finances from investors and reporters, Enron's onetime chief financial officer said today in the criminal trial of his former bosses.

Andrew S. Fastow, the finance executive, said he briefed Mr. Lay, who was then chairman, about the "serious problems" at the company in the summer and fall of 2001 and the two jointly met with investment bankers to explore a restructuring, sale or merger of Enron.

But in an interview with Business Week, Mr. Lay repeatedly assured the Wall Street and the media that Enron was "probably in the strongest and best shape that it has ever been in."

<snip>

Questioned for a second day by the prosecutor, John Hueston, Mr. Fastow today detailed a series of meetings between him, Mr. Lay and other executives in the late summer and fall of 2001 after Mr. Skilling had left the company citing personal reasons.

"I told Mr. Lay we had $5-to-$7 billion of embedded problems," Mr. Fastow said about a meeting a few days after Mr. Skilling left in August 2001. "Even if we are smart enough and don't make a mistake for five years, it would us take that long to work ourselves out of our problems."

...more...

[seafan]

1. This is the same framework for *'s Katrina/US economy rhetoric.

"Oh, don't worry! Our economy is booming and we'll send everything the New Orleans residents will need after this storm. And pay no attention to my VP's secret energy meetings with Kenny-Boy."


Keep fighting as hard as we can, people. We are making headway now.

It's unraveling very fast.

[lyonn]

2. Keep talking Fastow

Lay was running the company, their great leader, and now he wants to claim he had no idea what Fastow, Skilling, all those at the top were doing? It will be interesting if Lay does get cut loose. How can the defense discredit Fastow, seems the only way to avoid conviction.

Too bad they can't show the jury the tapes of them laughing about the little ol' lady from Pasadena (or something similar) losing her power. What scabs they are. They got Gray outed and Arnold annointed.

[UpInArms]

5. Enron Traders Caught On Tape

http://www.cbsnews.com/stories/2004/06/01/eveningnews/main620626.shtml

Four years after California's disastrous experiment with energy deregulation, Enron energy traders can be heard – on audiotapes obtained by CBS News – gloating and praising each other as they helped bring on, and cash-in on, the Western power crisis.

"He just f---s California," says one Enron employee. "He steals money from California to the tune of about a million."

"Will you rephrase that?" asks a second employee.

"OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day," replies the first.

The tapes, from Enron's West Coast trading desk, also confirm what CBS reported years ago: that in secret deals with power producers, traders deliberately drove up prices by ordering power plants shut down.

<snip>

"They're f------g taking all the money back from you guys?" complains an Enron employee on the tapes. "All the money you guys stole from those poor grandmothers in California?"

"Yeah, grandma Millie, man"

"Yeah, now she wants her f------g money back for all the power you've charged right up, jammed right up her a------ for f------g $250 a megawatt hour."

And the tapes appear to link top Enron officials Ken Lay and Jeffrey Skilling to schemes that fueled the crisis.

[fooj]

3. Duh. Kenny-boy is part of the rat bastard "boys club"!!!

Peace.

[0007]

4. and the "Pig Fuckers Club"

[Up2Late]

6. Fastow called greedy liar at Enron trial (AFP)

("I was extremely greedy and lost my moral compass..." HEY! When did they pass out "moral compasses, because I never even got one!)

Fastow called greedy liar at Enron trial

09/03/2006 07h07

HOUSTON, United States (AFP) - Defense attorneys called former Enron chief financial officer Andrew Fastow a greedy liar and manipulator as they tried to shift the blame for the fraud that led to the energy company's spectacular collapse away from his bosses.

Fastow, who has pleaded guilty to fraud and is the admitted architect of the risky off-balance-sheet partnerships that hid losses at Enron, said he was "ashamed of what I have done" but refused to take full blame for the destruction of what was the seventh-largest US company before its collapse. "I was extremely greedy and lost my moral compass," Fastow said in an emotional exchange with defense attorney Daniel Petrocelli, who took Fastow to task for causing his wife to spend a year in prison for his misdeeds.

Fastow appeared pained during this acknowledgment but in a veiled reference to the innocent pleas of Enron's founder Kenneth Lay and former chief executive officer Jeffrey Skilling, Fastow said he hoped history will record that "I had the character to admit what I did was wrong." Fastow testified that he had had lengthy discussions with both Lay and Skilling about the myriad of financial vehicles that contributed to Enron's bankruptcy at the end of 2001.

"I stole one way, they stole another way," he said, referring to Lay and Skilling, who are on trial for fraud and conspiracy. Fastow said Lay and Skilling knew the company was in a "death spiral" even as they painted a rosy picture for employees and the investing public.

(more at link below)

<http://www.afp.com/english/news/stories/060309000210.1u3h88bo.html>