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Former Enron Executive Pleads Guilty to Securities Fraud

The trial of the Enron corporation's top executives has been delayed until January 30 as a result of a plea bargain arrangement with former Enron Chief Accounting Officer Richard Causey, who pleaded guilty to one count of securities fraud in a Houston federal courtroom Wednesday. As a result of the deal, Mr. Causey is likely to be sentenced to seven years in prison, but his fate would have been worse had he been convicted on the more than 30 counts he faced.

The deal with Richard Causey is a boon for the federal prosecutors and a blow to former Enron Chief Executive Officers Ken Lay and Jeff Skilling. They and Mr. Causey were to have been brought to trial on January 17, but because of the last-minute plea bargain deal, the judge granted a request from defense attorneys for a two-week delay.

Prosecutors are expected to ask Mr. Causey about dealings within the bankrupt Houston energy-trading company that could implicate both Mr. Lay and Mr. Skilling. Both men have denied they knew the company's financial reports had been falsified to make its failing operations look profitable. The collapse of Enron four years ago had a worldwide impact, not only because of its international operations, but because so many people around the world had invested in the company.

Reid Weingarten, Richard Causey's attorney, says his client will fully cooperate with prosecutors and testify in court about everything he witnessed during his time at Enron.

"He will do one thing and that is tell the truth because that is who is, that is what he should do and that is what he is going to do," he said.

But attorneys for the other two executives say the government may have created doubt in the veracity of Mr. Causey's testimony in this last-minute deal. Some legal analysts in Houston also question how a jury will view the testimony of a man who claimed innocence for four years and then decided to plead guilty just before the trial was to begin.

Ken Lay attorney Mike Ramsey says the government prosecutors pressured Mr. Causey into the deal even though what he did may not have broken any law.

"Here he is pleading guilty to something that, in my mind, in all likelihood, is not even a crime at all," he said. "Not only is he not guilty of it, he pled to something that may very well not be a crime."

Under the terms of the deal, Mr. Causey would get seven years in prison for the one count of securities fraud and that sentence could be reduced to five years if prosecutors tell the sentencing judge that the former Enron executive was especially cooperative.

Both Mr. Lay and Mr. Skilling face charges that would keep them in prison for life if convicted on all counts. Mr. Lay has spoken publicly over the past year claiming he is innocent and asking former Enron employees with critical information to come forth and testify on his behalf.

He has also said that he will take the stand in the trial to answer all questions put to him by prosecutors, an unusual move for a defendant in any case and one considered especially risky in a case as complex as this one. Also expected to testify in the trial is former Chief Finance Officer Andrew Fastow, who pleaded guilty to two counts of conspiracy in January, 2004. He will also receive a reduced sentence as a result of a plea bargain.