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American Morning

Profiling Andy Fastow, Enron's Former CFO

Aired January 31, 2002 - 09:33   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.
JACK CAFFERTY, CNN ANCHOR: Enron's new CEO says the company can be saved, but there is going to be a lot of pain first. There's already been a lot of pain.

Andy Serwer, the editor at large for "Fortune" is here now. Before we get to Enron. Can the market -- how far does it have to go to make the January thing happen here? Big rally?

ANDY SERWER, "FORTUNE" MAGAZINE: Yeah, it's got to go a couple of hundred points. I think we're going to see this tug-of-war between optimism from the Fed and then pessimism with "Enronitis." People looking for the next blow up.

CAFFERTY: A lot of fear out there that there others -- other Enrons lurking.

SERWER: Right.

CAFFERTY: You're doing special series of reports on some of the key players inside Enron. Who are we looking at there?

SERWER: Yeah, we want to take a look at Andy Fastow, who was the CFO, the chief financial officer, of Enron, the third most important guy at the company after Ken Lay and Jeff Skilling, the CEO. He was really the chief architect of those nefarious partnerships that got the company in so much trouble. About 40 years old, and an aggressive, abrasive guy, we are told, at work, at home. He was a nice family man. Isn't that a surprise?

He went to Tuft's University in Massachusetts. Worked at Continental Bank in Chicago. And he become the CFO at Enron in 19 -- when he was only 36 years old. He's real high-riser. The FCC is after this guy. He's been dodging them, but apparently David Boies, the high profile lawyer is representing him. So, he's got good counsel, and he's got tens of millions of dollars.

CAFFERTY: Where do I recognize the name Boies from? He was in a televised trial. What was it?

SERWER: Microsoft.

CAFFERTY: Right. The Microsoft. Right.

SERWER: He was the one who was going after Microsoft, helping the government out. I want to tell you --

CAFFERTY: He also ran -- that's right, it was the elections down in Florida, the presidential election...

SERWER: Exactly.

CAFFERTY: ...he was involved in that.

SERWER: High profile guy. I want to tell you a quick story about Andy Fastow. I was at a Wall Street dinner this week, talking to a guy who helps run one of America's largest pension funds for one of America's five largest companies. And he told me that Andy Fastow came calling, trying to sell one of these partnerships to this pension fund.

And they explained it to him. Fastow explained this partnership to him, and the point was that this guy, Fastow, was going to get 20 percent of this deal, a $500 million deal. And the guys running the pension fund said, they just shook their heads. They'd never seen anything like this, where one guy at a company gets such a big cut. And they said they were too stupid to do the deal -- I bet they're happy about that right now.

CAFFERTY: Oh, I bet they are. The other -- the other interesting part of this story that you bring this morning. You know there's a reason that lawyers have the reputation they have.

SERWER: Yeah, this is truly amazing to me, Jack. You know, there's lot of shareholders suing Enron right now, trying to recoup their losses and good for them. They sue the company and they sue the directors. You sue the officers. You sue anyone you can.

CAFFERTY: Sure.

SERWER: Well, there is a lawyer in Houston, who has amended his lawsuit to go after not only the executives, but also the estate of Cliff Baxter, the Enron executive who apparently committed suicide. That means he's going after the house that the widow and children live in. And I say, "Lawyer, back off!"

CAFFERTY: Yeah, come on.

SERWER: Back off dude, there are no good guys here, Jack.

CAFFERTY: Yeah, I hear you. Andy, thank you. Andy Serwer. "FORTUNE" magazine.

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