Kenny Boy–getting off easy?

Sure looks that way…

US prosecutors dropped a number of charges against former Enron chief executives Ken Lay and Jeffrey Skilling as they rested their case on Tuesday.

Mr Skilling now faces 28 cases of fraud, conspiracy and insider trading, while Mr Lay faces six counts of conspiracy and fraud.

The defence is due to start making its case next Monday.

Enron collapsed in December 2001 after disclosures that it falsified accounts to hide debt and inflate profits.

The prosecution dropped three charges brought against Mr Skilling and one charge brought against Mr Lay because they had not presented any evidence for them while presenting their case.

As they wound down, prosecutors disclosed that the two defendants were paid a combined salary of nearly $375m between 1999 and 2001.

Mr Lay and Mr Skilling have pleaded not guilty to all charges, blaming Enron’s collapse on what they call rogue employees such as former chief executive officer Andrew Fastow.

Mr Fastow has already testified to setting up partnerships designed to help the firm hide losses of millions of dollars.

He has pleaded guilty to conspiracy and is facing 10 years in jail.

Meanwhile, here’s the lowdown on Fastow:

The government’s complaint against Enron seems to buy into this idea and the related notion that Enron was some valuable institution that “collapsed.” This myth is the same one that Skilling sold. But few are eager to disavow it because it makes everyone involved, including prosecutors (and journalists), actors in a great tragedy rather than witnesses to a much pettier scheme.

The charges against Fastow are pettier still. He is blamed for making side deals for himself, Kopper and even his family members. In these deals, Fastow allegedly got even richer than he would have as Enron’s CFO, even if he did have to violate the company’s vaunted code of ethics in the process.

The complaint fudges the key point that the deals were made to benefit Enron. It also continually repeats the phrase that Fastow schemed “to defraud Enron and its shareholders.” But while it’s possible to do both, any coherent theory of the case would require the government to choose (or at least emphasize) one or the other.

If Fastow was acting on behalf of the company–and with the explicit or tacit cooperation of the board as well as Lay or Skilling–then the charges that he collected side payments on the fraudulent deals would seem almost not worth fussing about.

Fastow took the Fifth, so he didn’t testify. Damn shame, really; besides himself, he might have incriminated some much bigger fish.

And now, it looks as if those sharks just might swim away.

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