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Published: Friday, 12/30/2005

Enron noose tightens

THE JUSTICE Department's lengthy investigation of corporate malfeasance in the 2001 collapse of the Enron Corp. surely qualifies as the best current example of a judicial perpetual motion machine.

Yet, in exchange for a reduced sentence, Richard Causey, former chief accounting officer of Enron, has agreed to testify against his former boss, Kenneth Lay, company founder, as well as one-time CEO Jeffrey Skilling.

Causey, charged with fraud, insider trading, lying to auditors, and money laundering in connection with off-the-book transactions that concealed losses and painted a false picture of the company's financial health, also escapes having to go to trial with the two top defendants and thus risking harsher punishment.

Critics say his plea bargain shows that the government is not sure of winning its case, but his testimony, in addition to that of other high-ranking officials, could be damaging to the holdout defendants whose lawyers will have to work overtime to try to impugn his testimony. White-collar defendants often have deep pockets for legal contests of this sort.

Mr. Lay was brought before the court nearly a year and a half ago in handcuffs to face a 65-page, 11-count felony indictment by a federal grand jury in connection with the collapse of the company that fried investors big time, threw thousands of employees out of work, and wiped out the retirement savings of many of them.

It was a prime example of the cowboy capitalism so beloved by the White House as the answer to all problems, from economic woes to the heartbreak of psoriasis.

George W. Bush, who gave the Kenny Boy nickname to Mr. Lay, let it be known through subordinates that it had been "quite some time" since Mr. Bush and the Enron top banana had spoken. There's a frosty brush-off for you.

Mr. Lay has been employing the "simple barefoot boy from Wall Street" alibi that he didn't know what his clever subordinates had been up to. One of them will be in the dock with him, unless he agrees to turn state's evidence, along with Causey and other top officials who were involved in the Enron bookkeeping scam. The mills of justice, it is said, grind slowly (which is true), but they also grind exceedingly fine.

In any case Mr. Lay will have his day in court to try to make a convincing case that he was simply too dumb to run such a big corporation, and thus should be acquitted.

With Enron officials falling on the swords of the prosecutors right and left, and top officials of the company copping pleas, that might be a tall order for Mr. Lay. The Enron case is an odious example of business racketeering that wrecked the financial security of many faithful employees.

This is one trial that deserves close scrutiny for the light it sheds on corporate moral rot and greed in today's America.



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