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CNN Live At Daybreak

Former Enron Executive to Plead Guilty to Conspiracy to Commit Wire Fraud and Money Laundering

Aired August 21, 2002 - 06:45   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL COSTELLO, CNN ANCHOR: CNN has learned that a former Enron executive is expected to plead guilty to charges stemming from the company's collapse. Sources say Michael Kopper is to plead guilty to money laundering and conspiracy to commit wire fraud as early as today. It would be the first admission of guilt from an Enron executive.
CNN's Fred Katayama has the story.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): Michael Kopper took the Fifth when he faced Congress in February, but sources close to the investigation say the former Enron executive will plead guilty as early as Wednesday. The charges: conspiracy to commit wire fraud and money laundering. They're the first charges in the government's case against the energy trading company.

Kopper was formerly a midlevel executive at Enron in global finance. His move could put pressure on Enron's former Chief Financial Officer Andrew Fastow, the alleged mastermind of the partnerships the company set up to hide its debt. Kopper was Fastow's right hand man.

THOMAS AJAMIE, SECURITIES LAWYER: Starting with a midlevel executive like Michael Kopper is exactly how the government normally prosecutes these types of cases. What they need is someone who is high and up enough to know what was going on but not so high that he's actually one of their targets. The real targets are going to be the chief financial officer, the chairman, the president and the CEO.

KATAYAMA: Kopper's attorney did not return a call seeking comment.

An internal report on Enron released earlier this year found Kopper had violated the company's code of ethics while reaping millions of dollars for himself.

Fastow chose Kopper to run a partnership. Kopper and his domestic partner invested $125,000 in the partnership and eventually walked away with $10.5 million.

A guilty plea would be a big plus for the Justice Department. It had been criticized for not bringing any indictments against former Enron executives. Nearly nine months have passed since Enron filed for bankruptcy protection. STEPHEN RYAN, FORMER FEDERAL PROSECUTOR: There's no rush in these cases. In other words, it's not to satisfy the court of public opinion that you do this, but it's actually to get it right.

KATAYAMA (on camera): The conviction of Enron's former auditor, Andersen, and the WorldCom bankruptcy diverted the public's attention from Enron. But a guilty plea could put the spotlight back on the energy company and it could mark the first of other dominoes to fall from its executive suites.

Fred Katayama, CNN Financial News, New York.

(END VIDEOTAPE)

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