Enron’s former top accountant strikes plea deal, will testify

HOUSTON — Enron’s former chief accounting officer, Richard Causey, has struck a plea bargain with federal prosecutors and will avoid going to trial with the fallen energy company’s two top executives, according to a person familiar with the negotiations.

Causey was expected to plead guilty today to one or more of the 34 criminal charges pending against him, this person told The Associated Press Tuesday on condition of anonymity because of the private nature of the discussions.

Causey, 45, agreed to testify against his former bosses, Enron Corp. founder Kenneth Lay and former CEO Jeffrey Skilling, in exchange for a much lesser prison sentence than he would receive if convicted on all counts. The trial is scheduled to begin next month, but a delay is considered likely since defense attorneys would want more time to prepare for the government’s new witness.

Causey is charged with fraud, conspiracy, insider trading, lying to auditors and money laundering for allegedly knowing about or participating in a series of schemes to fool investors into believing Enron was financially healthy. The company imploded in late 2001 amid disclosures of complicated financing schemes that gave the appearance of success.

U.S. District Judge Sim Lake has scheduled a change-of-plea hearing for this afternoon. Causey pleaded not guilty to the charges against him when he was indicted in January 2004.

Lay’s lead attorney, Michael Ramsey, didn’t immediately respond to a request for comment, nor did one of Causey’s lawyers, Reid Weingarten.

Causey’s plea and agreement to cooperate with prosecutors is a departure from the unified defense he, Skilling and Lay have shown for nearly two years.

Daniel Petrocelli, Skilling’s lead lawyer, said earlier Tuesday that he planned to ask Lake to postpone the Jan. 17 trial for up to two months if Causey struck a deal with the government. The additional time would allow his team and that representing Lay to prepare for yet another key prosecution witness.

Causey could be more damaging to Lay and Skilling than former Enron finance chief Andrew Fastow, who joined the government’s cadre of cooperating witnesses when he pleaded guilty to two counts of conspiracy in January 2004. Unlike his former peer, Causey didn’t skim millions of dollars for himself from shady deals and therefore would bring less baggage to the witness stand.