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Making the Enron mess worse

Judge should have accepted Lea Fastow's plea deal.

A Houston judge is unnecessarily blowing a plea deal between prosecutors and the wife of a former Enron exec. Lea Fastow, wife of former Enron finance chief Andrew Fastow, was ready to plead guilty to filing a false tax return. She admitted failing to report $47,000 in income on her family’s returns and was ready to serve time. Five months in prison, five months home detention, a 10-month sentence, a term entirely consistent with the federal sentencing guidelines for this crime.

In fact, a sentence almost identical to the national average term for tax offenders, even though that average includes people who have criminal records, which she doesn’t have. Prosecutors also pointed out that 60 percent of tax offenders either serve split sentences, meaning some at home and some in prison or just get probation. This was a tough but fair sentence. And yet, Judge David Hittner rejected the plea, refused to say why or exactly what the sentence would be. He just seemed upset that the deal would restrict his ability to choose the sentence.

There are a lot of judges frustrated by the restrictive sentencing guidelines, and I’m certain this judge also wants to make it seem like he’s going to be tough on crime. But by rejecting this deal, the judge is just jeopardizing future prosecutions where she was set to help, in exchange for the possibility of a few more months behind bars. Now, let’s make one thing clear.

Lea Fastow did not play any role in the fall of Enron. This is a personal tax fraud case and she’s been assisting the government throughout the process. She helped them cut a deal with her husband, where he admitted to falsely making Enron appear financially sound, while profiting himself. That’s a serious crime. He will serve 10 years. More important, his cooperation will now allow the government to prosecute many of Enron’s top dogs.

Andrew Fastow’s testimony already helped indict two former officials including ex CEO Jeffrey Skilling. Without Andrew Fastow, it would not have happened. Now, Lea Fastow committed a crime, a crime she probably wouldn’t have been prosecuted for if she hadn’t been connected to Enron, but a crime nonetheless. She should serve time and she would have. Instead the government will now have to spend hundreds of thousands, if not millions, on a prosecution. And for what? The possibility that she’ll be acquitted and serve no time, or possibly be convicted and have to serve some more months behind bars? What a waste.