Former top Enron accountant surrenders at Houston FBI office

HOUSTON -- Enron Corp.'s former top accountant surrendered early Thursday and was taken in handcuffs to the courthouse to face federal charges related to the disgraced energy giant's 2001 collapse.

Richard A. Causey, 44, accompanied by a pair of lawyers, walked into the Houston offices of the FBI just before daybreak. They had no comment as they entered the building. Less than an hour later, Causey arrived at the downtown courthouse.

Causey had been expected to turn himself in and appear in federal court two weeks ago on charges stemming from the Justice Department's two-year Enron investigation. The case involving him, however, moved to the back burner when a plea bargain package for former Enron finance chief Andrew Fastow and Fastow's wife, Lea, hit a snag.

Last week, the Fastows pleaded guilty in their separate cases -- Andrew Fastow to two counts of conspiracy, Lea Fastow to one count of filing a false tax return. Those guilty pleas needed to be secured before moving on to Causey, sources close to the investigation said Wednesday on condition of anonymity.

Like Andrew Fastow, Causey reported directly to former chief executives Kenneth Lay and his successor, Jeffrey Skilling. Causey and Fastow split financial duties at Enron and were at the same management level.

It was unclear what charges Causey would face.

"Rick Causey has done absolutely nothing wrong and we will vigorously contest any charges the government may bring," Mark Hulkower, one of Causey's attorneys, said Wednesday.

Andrew Fastow admitted that he and others in Enron's senior management misled investors about Enron's finances to inflate its stock and that he schemed to enrich himself and others at shareholders' expense.

Andrew Fastow's October 2002 indictment referred to the chief accounting officer as having a secret deal with Fastow ensuring he wouldn't lose money when one of many shady partnerships he ran did business with Enron. Causey was chief accounting officer when the partnerships were operating.

Causey was one of many Enron executives who joined the energy giant after working at its former outside auditor, Arthur Andersen LLP. He started at Enron in 1991 as assistant controller and became chief accounting officer in 1999.

Enron imploded in late 2001 in a sea of hidden debt, inflated profits and accounting tricks.

Causey was fired in February 2002 after an internal probe concluded he failed in his duty to adequately look out for Enron's interests when the energy giant did deals with Andrew Fastow's partnerships. He also invoked the Fifth Amendment and declined to answer questions when he appeared before a congressional committee that year.

In a related case, lawyers for two of four former Merrill Lynch & Co. executives and two former midlevel Enron executives charged with conspiracy stemming from one of Andrew Fastow's shady deals said Wednesday their clients maintain their innocence and they intend to go to trial as scheduled in June.

The six former executives are charged with conspiracy for alleged involvement in a December 1999 deal in which a loan from Merrill Lynch was disguised as a sale of Nigerian barges so Enron could appear to have met earnings targets. Prosecutors say the executives knew the deal was a sham because Andrew Fastow secretly assured that Enron would buy back Merrill Lynch's interest in the barges within six months.

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