Former Enron finance chief Fastow negotiating plea deal

HOUSTON -- Former Enron Corp. finance chief Andrew Fastow is negotiating a plea bargain that could send the high-powered executive to prison for his role in the accounting scandal that brought down the energy company, sources close to the case said Wednesday.

Authorities also were drawing up criminal charges against Enron's former chief accountant, Richard A. Causey, who was expected to surrender today, sources with knowledge of the matter told The Associated Press, speaking on condition of anonymity. The exact nature of the complaint was not immediately clear.

If attorneys and judges agree on the proposed plea deal with Fastow, the former executive could appear in court to change his innocent plea to guilty as early as today, the sources said.

Fastow would be the highest-ranking executive to plead guilty in the criminal investigation of Enron. The company's collapse in 2001 was the first in a series of scandals that rattled corporate America and caused the stock market to plunge.

Fastow allegedly masterminded a complex web of schemes that hid Enron's debt, inflated profits and allowed him to skim millions of dollars for himself, his family and selected friends and colleagues.

Fastow's wife, Lea, a former assistant treasurer at Enron, also is negotiating a plea deal along with her husband, the sources said.

The potential plea deal raises the possibility that prosecutors are closer to bringing a case against Enron's former top executives, Kenneth Lay and Jeffrey Skilling. Plea deals often involve agreements to testify against others, but there was no immediate indication whether that was happening in this case.

The Houston Chronicle, citing sources it did not identify, reported Wednesday that federal prosecutors are offering Fastow a 10-year sentence. A deal that called for a five-month sentence for Lea Fastow was rejected by U.S. District Judge David Hittner on Wednesday. The judge said the deal was too binding and he wanted more leeway on her sentence.

Attorneys for the Fastows did not return calls seeking comment. The family's spokesman, Gordon Andrew, declined comment.

Fastow, 42, is charged with 98 counts of fraud, money laundering, insider trading and other charges. He is free on $5 million bond pending trial scheduled for April.

Lea Fastow, 42, is set to go to trial Feb. 10 on six counts of conspiracy and filing false tax forms.

Causey, 43, was fired Feb. 14, 2002, after a board of directors report noted his failure to properly monitor a partnership that became a focal point of the fraud investigation. The partnership, called LJM, was devised by Fastow.

Causey's attorney, Reid Weingarten, did not immediately return a call.