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Kopper's Sentence Depends on His Usefulness to Authorities

Aired August 21, 2002 - 11:53   ET

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


FREDRICKA WHITFIELD, CNN ANCHOR: For the first time, out of Houston now, a former Enron executive pleads guilty. Michael Kopper pled guilty today to money-laundering and conspiracy to commit wire fraud.
Our Ed Lavandera is at that federal district court in Houston. He has been following this story for us -- Ed, what do you have there?

ED LAVANDERA, CNN CORRESPONDENT: Well, Fredricka, if appearances are any indication as perhaps the score card of how this Enron investigation is going, clearly investigators and prosecutors appearing much more upbeat today as they walked into the courtroom for Michael Kopper's guilty plea announcement that he made just a short while ago inside this federal courtroom in Houston, Texas.

Michael Kopper appearing stoic and very serious. He did plead guilty to the counts of conspiracy wire fraud and money-laundering. The maximum sentence that he faces at this point is 15 years and a $500,000 fine. We also understand that he would have to return $12 million in profits that investigators believe he made illegally in the partnerships while he worked at Enron.

Just to break that down, $8 million of that would go to the SEC, the Securities and Exchange Commission, $4 million of that would go to Enron victims. Now, before we go any further on the Enron victims' case -- exactly how that will be divided up at this point, is not exactly clear, but we understand about $4 million of that will be earmarked for Enron victims.

Now, of course, the bigger picture here is how will Kopper be able to help investigators, and I bring up the maximum sentence that he can get at this point, which is 15 years, $500,000 fine. That sentence will be dependent upon how well investigators think Kopper cooperates with them in the weeks and months ahead, and clearly the bigger person they are going after at this point is Andrew Fastow, the chief financial officer. Kopper worked directly underneath Fastow in creating that partnership, the Chewco partnership, which is credited with bringing the downfall of Enron. He worked -- those partnerships basically hid losses on the books for Enron and turned them into profits, which in turn caused investors to invest heavily into Enron. They thought they were making good investments. It turned out they were making very poor investments at the time.

So, Kopper agreed to cooperate with investigators here, and what kind of sentence he gets at this point will depend on what kind of information and the quality of that information that he gives up to investigators and prosecutors. But clearly, a day where prosecutors and investigators here feel very confident, very happy about the way this is moving. Many people consider this the first major public breakthrough in moving this Enron case forward -- Fredricka.

WHITFIELD: Ed, prosecutors are smiling today because they are just certain that he really is a crucial potential witness in this growing case against Enron. Now, when talking about the $12 million that he now has to give back, you mentioned $4 million would go to the Enron victims. Are we talking about most of those victims being those who lost their jobs directly, or lost so many of the millions in their 401(k)s?

LAVANDERA: I think that those are the details that will have to be worked out, and in a short while, the Enron investigators here will come out, as well as Kopper's attorney will come out as well, and perhaps we will get some more clarification as to what exactly that means, as to what could happen with that -- with that $4 million. But I would also venture to point out that $4 million probably won't go a very long way into helping the thousands of people that were affected by this company's collapse.

One other note to pass along before you leave me here, that Kopper did mention in court that had been seeking counseling, visiting a psychologist because of -- due to stress related over the last year. Another clear sign, his name popped up in Powers report 108 times, and I think another clear sign of just the amount of pressure he's been under over the last couple of months -- Fredricka.

WHITFIELD: All right. Ed Lavandera from Houston, thank you very much for that update.

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