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Enron's Ex-Financial Chief Testifies in Fraud and Conspiracy Trial

The man seen as the key witness in the Enron trial took the stand Tuesday in a Houston Federal courtroom. Enron's former Chief Finance Officer Andrew Fastow is testifying in the trial of the bankrupt energy trading company's former Chairman Ken Lay and former Chief Executive Officer Jeff Skilling.

The appearance of Fastow on the stand could be the definitive moment in the Enron trial. Prosecutors hope his testimony will substantially support their case that the two men on trial were aware of efforts to paint a false picture of the company's financial health and approved of actions taken by Fastow and others to further that end.

Defense attorneys, on the other hand, have portrayed Fastow as the chief villain in the demise of what once was one of the largest corporations in the United States. The company collapsed in late 2001 after it became clear that its stock price was based on a financial house of cards in which losses were hidden and deals made with partner companies were made to look profitable.

In his testimony Tuesday Fastow spoke of how he managed two partnerships with the expressed goal of inflating Enron earnings and how this was hidden from investors. He described a 1999 conversation he had with Skilling in which he said the former CEO encouraged his transactions with the words, "Get me as much of that juice as you can."

Prosecutors say the partnerships with which Fastow conducted these transactions were designed to purchase underperforming assets from Enron so as to make the company appear more profitable than it really was. Fastow is the latest in a string of witnesses who have described how company officials lied to investors and their own employees about the real nature of Enron's financial dealings.

The 44-year-old Fastow faces 10 years in prison under a plea bargain arrangement with prosecutors in which he pleaded guilty to two counts of fraud and agreed to testify in the case against Lay and Skilling. Prosecutors are expected to keep their questions tightly focused and not prolong his appearance, but defense attorneys, seeking to undermine his testimony during their cross-examination, are expected to keep him on the stand for several days.