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CNN Live At Daybreak

Plea Deal Expected Today in Enron Scandal

Aired January 08, 2004 - 05:30   ET

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


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


CAROL COSTELLO, CNN ANCHOR: In the Enron scandal, a plea deal is expected today in the cases against the company's former chief financial officer, Andrew Fastow and his wife Lea.
As our Chris Huntington reports, the Fastows have overwhelming incentives to settle with the government.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Andrew Fastow, the mastermind of Enron's fatally flawed financial dealings, who faces the possibility of spending the rest of his life in prison, is negotiating a plea bargain with the Justice Department that sources close to the case tell CNN would significantly limit his time in prison.

TOM AJAMIE, SECURITIES LAWYER: We're hearing a time frame of roughly 10 years is the deal that's on the table right now that Andy Fastow may take. Some kind of deal has been cut, meaning that he's giving the government some type of information. He's definitely cooperating.

HUNTINGTON: But sources with knowledge of the negotiations say the deal may hinge on the fate of Fastow's wife. Lea Fastow was an assistant treasurer at Enron and faces six criminal charges of her own for allegedly helping her husband with some of those now infamous off balance sheet transactions. But late today, according to a source familiar with her case, a federal judge rejected a deal that would have reportedly trimmed her prison time to just five months, from a potential sentence of more than 10 years.

The Fastows have two young sons, which may be an important motivating factor in their negotiations. For federal prosecutors, though, the motivation to bargain is driven by what Andrew Fastow could tell them about Enron's former chairman, Kenneth Lay, and former CEO Jeffrey Skilling, who so far have escaped indictment.

JACOB ZAMANSKY, SECURITIES LAWYER: One of the key ingredients of this deal will be that Fastow has to give complete cooperation, say exactly what he knows, put Lay and Skilling and others at meetings. So he's going to have to really come clean. He knows where all the bodies are buried.

HUNTINGTON (on camera): Sources familiar with the negotiations say the talks with the Fastows continue and that federal prosecutors hope to have a joint plea bargain to announce Thursday in Houston.

Chris Huntington, CNN, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired January 8, 2004 - 05:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: In the Enron scandal, a plea deal is expected today in the cases against the company's former chief financial officer, Andrew Fastow and his wife Lea.
As our Chris Huntington reports, the Fastows have overwhelming incentives to settle with the government.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Andrew Fastow, the mastermind of Enron's fatally flawed financial dealings, who faces the possibility of spending the rest of his life in prison, is negotiating a plea bargain with the Justice Department that sources close to the case tell CNN would significantly limit his time in prison.

TOM AJAMIE, SECURITIES LAWYER: We're hearing a time frame of roughly 10 years is the deal that's on the table right now that Andy Fastow may take. Some kind of deal has been cut, meaning that he's giving the government some type of information. He's definitely cooperating.

HUNTINGTON: But sources with knowledge of the negotiations say the deal may hinge on the fate of Fastow's wife. Lea Fastow was an assistant treasurer at Enron and faces six criminal charges of her own for allegedly helping her husband with some of those now infamous off balance sheet transactions. But late today, according to a source familiar with her case, a federal judge rejected a deal that would have reportedly trimmed her prison time to just five months, from a potential sentence of more than 10 years.

The Fastows have two young sons, which may be an important motivating factor in their negotiations. For federal prosecutors, though, the motivation to bargain is driven by what Andrew Fastow could tell them about Enron's former chairman, Kenneth Lay, and former CEO Jeffrey Skilling, who so far have escaped indictment.

JACOB ZAMANSKY, SECURITIES LAWYER: One of the key ingredients of this deal will be that Fastow has to give complete cooperation, say exactly what he knows, put Lay and Skilling and others at meetings. So he's going to have to really come clean. He knows where all the bodies are buried.

HUNTINGTON (on camera): Sources familiar with the negotiations say the talks with the Fastows continue and that federal prosecutors hope to have a joint plea bargain to announce Thursday in Houston.

Chris Huntington, CNN, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com