Now, Fastow and Olis Have Something in Common: Six Years
It's not often that we're happy to get less than what we bargained for. But presumably, former Enron executive Andy Fastow is elated with the six-year prison sentence he received for his role in the criminal activity that brought the demise of Enron as reported in articles like this one at Forbes. After all, Fastow had originally agreed to a 10-year sentence in exchange for his cooperation with prosecutors, which he'd testified about in some detail during the Skilling-Lay trial.
The six-year sentence gives Fastow something in common with Jamie Olis, the midlevel Dynegy executive we blogged about here last week. But as Tom Kirkendall of Houston's Clear Thinkers writes, six years is about all the Fastow and Olis have in common. From this Kirkendall post:
On one hand, Andrew Fastow -- who served up his wife
as a sacrifical lamb for his embezzlement of millions from Enron that
triggered one of the largest bankruptcy cases in U.S. history, who used the NatWest Three to hide his embezzlement of millions more and then turned on the U.K. bankers to save his skin, who very well may have forged Richard Causey's initials on the Global Galatic "agreement," whose bizarre testimony during the Lay-Skilling trial was largely discounted by jurors and who had a large hand in ruining the careers of four innocent Merrill Lynch executives in order to lessen his prison sentence -- is sentenced to six years in prison.
On the other hand, Jamie Olis
-- who worked on a transaction to improve his company's earnings, did
as he was told by his superiors, did not profit from the transaction,
defended his company and himself against allegations of wrongdoing with
regard to the transaction and did not trigger any type of insolvency
case by his company -- is sentenced to six years in prison.
Morever, as Austin defense lawyer Jamie Spencer points out in this post, Judge Lake reduced the Olis sentence to six years expressly because the
fraud involved was not meant to defraud the company or its
shareholders and was not meant to enrich the defendant. Seems that under Judge Lake's standard, Fastow doesn't deserve a six-year sentence, whether he cooperated or not.
So what explains the Fastow sentence? Is it simple irrationality as Kirkendall suggests? Did a good word from Enron shareholders, now involved in class action litigation against Enron that has been aided by Fastow's continued cooperation make a difference, as noted in Peter Lattman's WSJ Law Blog post? Or is this the kind of leniency that defendants can expect in exchange for cooperation with the government and foregoing rights to a jury trial, as suggested by Ellen Pogdor at the White Collar Crime Blog?
Maybe by the time Fastow and Olis are released from prison, we'll have figured out a way to punish and deter corporate crime while maintaining some semblance of fairness in our system of justice.
Posted by Carolyn Elefant on September 26, 2006 at 06:50 PM | Permalink
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