Victims get to speak at Fastow hearing

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By JUAN A. LOZANO, Associated Press Writer

Sun Sep 24, 5:25 PM ET

 

 

 

HOUSTON - Former Enron Corp. employee Diana Peters knows there won't be any suspense when Andrew Fastow, a key figure in the former energy giant's collapse, is sentenced this week because he's already agreed to a 10-year prison term.

 

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But she is grateful that those affected by Enron's downfall will have a chance to face Fastow before he goes to prison and tell him how his actions affected their lives, since the federal judge in the case has invited them to speak their minds.

 

Peters won't be able to attend Fastow's sentencing hearing Tuesday because she can't take time off from work. But she has submitted a letter to the court detailing how Enron's collapse caused her financial hardship.

 

She has been forced to work two jobs, including cleaning office buildings on weekends; she also had to swallow her pride and ask her son to move back home so he could help his parents pay their bills.

 

"If (Fastow) can spend 100 years in jail, that would be fine with me," Peters said. "If he spends 10 years in jail, he still has a life. I will never get back what has been taken. I will never be able to retire."

 

Peters, 57, said she lost about $75,000 in her 401(k) retirement plan at Enron, where she worked 10 years as a computer technician, when the company's stock became worthless.

 

Under a two-year-old federal law that enhances the rights of victims of federal crimes, U.S. District Judge Kenneth Hoyt is allowing Enron's victims to speak about how the company's financial implosion hurt them.

 

Fastow, whose complex schemes as chief financial officer helped lead to the company's downfall, agreed to serve the maximum 10-year term for his admitted crimes when he pleaded guilty in 2004.

 

His cooperation and testimony helped prosecutors secure the convictions of Enron founder Kenneth Lay and the former chief executive, Jeffrey Skilling.

 

"I really think you will hear some gut wrenching stories from people who are going to say that this ruined their lives, their savings, their retirement," said Steve Cron, a criminal defense attorney in Santa Monica, Calif.

 

Fastow, 44, was originally indicted on 98 counts of fraud, conspiracy, insider trading, money laundering and other charges. He pleaded guilty to two counts of conspiracy, admitting to running various schemes to hide Enron debt and inflate profits while enriching himself. As part of the agreement, he surrendered nearly $30 million in cash and property.

 

Charles Prestwood, 68, a former pipeline operator who retired from Enron in 2000 and then lost $1.3 million in retirement savings a year later, said he is grateful Hoyt is allowing victims to face Fastow.

 

"It's good that we can be heard because normally that don't happen," he said. "It gets a load off of (victims') shoulders."

 

But Prestwood, who has heart problems, said he'll skip Fastow's hearing so he can save his strength and speak out at Skilling's Oct. 23 sentencing.

 

Skilling and Lay were convicted in May of conspiracy and fraud. Lay's attorneys are working to erase his convictions since his July 5 death from heart disease.

 

During four days of testimony and cross examination, Fastow said Lay and Skilling knew that the CFO and his staff engineered fraudulent financial structures. Fastow also shed tears when he recounted how he roped his wife, Lea, into helping him hide ill-gotten gains from his schemes.

 

She pleaded guilty in 2004 to a misdemeanor tax crime and served a year in prison.

 

Enron, once the nation's seventh-largest company, crumbled into bankruptcy proceedings in December 2001 after years of accounting tricks could no longer hide billions in debt or make flailing ventures appear profitable. The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.

 

Still, not all former Enron employees are interested in speaking at the sentencing of Fastow or any other Enron defendant.

 

"It's probably not worth the time and effort for something that is so much water under the bridge to some degree," said Eric Eden, 38, who lost his job running Enron's computer-drafting department.

 

Eden now runs a Houston-area sprinkler company called Watering Made Easy with his brother.

 

Justice Department spokesman Bryan Sierra said he couldn't predict how many Enron victims would speak at Fastow's sentencing.

 

David Gerger, one of Fastow's attorneys, had no comment.