Finally, an Enron Conviction
By Lorraine Woellert
The Justice Dept. finally landed a high-level conviction on Sept. 10 in its case against Enron, but this catch won't necessarily lead to bigger fish. Appearing in U.S. District Court in Houston, former Enron Treasurer Ben Glisan Jr. pleaded guilty to federal conspiracy to commit wire and securities fraud. He was cuffed and immediately hauled off to a minimum-security prison, where he will spend the next five years.
Glisan avoids a costly trial, and 23 other counts against him were dismissed. So what does Justice get? Besides giving prosecutors a photo-op "perp walk" and a day of attention-grabbing headlines, Glisan, 37, will have to cough up nearly $940,000 in ill-gotten Enron profits. He also forfeits $412,000 he paid to the federal government in taxes on that "income" and must pony up $100 for court costs.
"HOUSE OF CARDS."
"I take full responsibility for my actions at Enron," Glisan told U.S. District Judge Kenneth Hoyt in Houston. Glisan's attorney, Henry Schuelke, did not return phone calls seeking comment.
What Justice didn't get may be even more important. After months of talks, Glisan and prosecutors couldn't reach a deal to avoid prosecution and speed the agency's investigation into Enron Corp. And don't look for Glisan to testify against bigger fish -- most notably former Enron Chairman Ken Lay, CEO Jeff Skilling, or even Glisan's former boss, CFO Andy Fastow, who is facing his own 100-count charge.
Justice officials say Glisan has been uncooperative in the agency's efforts to investigate the energy-trading company, which collapsed in 2001. It was one of the first of a series of big corporate meltdowns that shook financial markets and drove Congress to enact tough new oversight on big business. Investors and employees collectively lost hundreds of millions of dollars. Two years later, only one Enron exec -- Glisan -- is behind bars.
Glisan's lack of cooperation and relatively light sentence might not seem like much of a big win for Justice. But having a top-level exec in prison has its own impact. "He has admitted for the first time that Enron was a house of cards," said Leslie Caldwell, director of the Justice Dept.'s Enron Task Force, speaking to reporters outside the Houston courthouse. "There is a lot of value in someone standing up and admitting this." Indeed, Caldwell said, she was "never banking on him" to cooperate and Glisan's testimony won't be needed to convict Fastow, whose trial is set to begin in April.
The call for Enron execs responsible for the collapse to be put behind bars likely will continue unabated. Certainly, criminal work is tedious and time consuming. But the Justice Dept's biggest critics -- mostly politicians -- do the agency no favors by pushing for speedy and splashy indictments. Far worse would be for Justice to rush an indictment only to lose the case in a high-profile trial.
Clearly, the public hasn't forgotten about Enron, and Glisan's trip to the pokey, while of some comfort to those who were victimized by Enron, also will help to sustain the calls for his bosses to be brought to justice.
Woellert is a correspondent for BusinessWeek in the Washington bureau