2004-1-29
This is Bob Doughty with the VOA Special English Economics
Report.
The large American energy services company, Enron, failed two
years ago. It had been the seventh largest company in the United
States. More than twenty people have been charged with financial
crimes related to the company's hidden debt, inflated profits and
accounting tricks.
On January twenty-second, Enron's former chief accounting officer
faced charges of helping Enron cheat investors and others. Richard
Causey said he is not guilty. He says he believed all of Enron's
financial records were correct. He says he followed rules called the
Generally Accepted Accounting Standards.
The government says Mister Causey used his knowledge of
accounting to make Enron look profitable. The government says Mister
Causey sought to gain from his actions by causing the price of Enron
stock to increase.The government has charged Mister Causey with
planning businesses related to Enron, called partnerships. Enron
used financial exchanges with partnerships to hide big financial
losses. The government says these exchanges do not meet the
requirements for real business exchanges. This is because only
Enron's money was at risk.
Mister Causey is an important person in the Enron case. The
charges came soon after another top official of Enron agreed to a
deal.
Andrew Fastow was the chief financial officer at Enron. On
January fourteenth, he admitted guilt for two criminal acts. He will
be sentenced to ten years in prison. Fastow had faced more than
ninety separate charges. The deal depends on evidence he will offer
in the future.
Fastow admitted that he hid the financial situation at Enron by
using partnerships. He admitted using partnerships for his own gain.
He has been forced to return more than twenty-three-million dollars
and other property to the government. Lea Fastow, Mister Fastow's
wife, also admitted to one charge of avoiding taxes on money made
from one partnership.
Fastow and other former Enron officials have admitted guilt. They
are expected to give evidence that will be used against Mister
Causey.
What is different between the two cases is that Mister Fastow has
admitted to cheating Enron. Mister Causey is charged with cheating
investors and others.
This VOA Special English Economics Report was written by Mario
Ritter. This is Bob Doughty.