By LOREN STEFFY
Copyright 2004 Houston Chronicle
Don't cry for Lea Fastow.
Judge David Hittner is doing everything he can to turn the Enron heiress into a sympathetic character. With his decisions this week, Fastow seems more and more a hapless victim torn from the arms of her children and hauled off to the gulag.
In the latest indignity, Hittner ordered Fastow to report to the downtown Federal Detention Center instead of the more upscale calaboose in Bryan she'd requested. No horticulture classes or playground equipment for the kids, just a well-worn orange jumpsuit, public showers and an occasional trip to the roof for some incidental sunshine in the recreation area.
You can choose your crime, but not your punishment.
Lea Fastow is, by her own admission, a tax cheat. Her crime was being well-connected to an Enron insider — her husband, Andrew, Enron's former chief financial manipulator — and being all too willing to take her turn at the trough. Compared to her husband, though, she's a kid with a calculator.
In the last few months, Hittner has done all he can to make her the whipping girl for Enron's sins. He eschewed her plea deal in the spring, he's ignored her requests for more family-friendly incarceration, and he refused a request — which even the prosecutors supported — to send a standard background report on Fastow to the Bureau of Prisons. When Fastow's attorney, Mike DeGeurin, sent the report anyway, Hittner lambasted him in a 10-page order distributed to all federal judges in the region.
Lea, after all, was a tool. Prosecutors needed her husband's testimony, and he wasn't cooperating. So they went after Lea and threatened her with prosecution. She might go to jail at the same time as her husband, and what would happen to their two children? Andrew agreed to serve 10 years and rat out his old cronies, provided Lea would be out in time to watch over the little ones. It's an interesting twist on the trials of the two-career couple. Trying to juggle their busy prison schedules, the Fastows were hoping to still find time for the kids.
From the moment they agreed to plea, the Fastows have tried to work the legal system as if it were just another deal. They wanted to coordinate sentencing. Andrew would plea only if Lea was guaranteed a light sentence. It's as if they believed they still had some say in making the rules.
Lea Fastow is a symbol of the complacency that nurtures white-collar crime. Corporate executives don't usually go bad by breaking the law. They bend it slowly, inching toward criminality, a justification here, a rationalization there. And they convince others — often friends and family — to help them, by insisting that what they're doing isn't wrong, or that it would result in a greater good such as saving the company. Just tweak the numbers and fix it when the business improves.
In the Fastows' case, Enron's financial games were a family sport. The couple used their two children as a conduit to collect their Enron booty. Andrew disguised personal profits from the web of illicit partnerships he assembled as gifts to his children from associate Michael Kopper. Between December 1997 and February 2000, Andrew and Kopper funneled $45,000 in partnership loot through Lea, and $30,000 each in the form of "gifts" to the Fastow children, according to Andrew's indictment.
They drew their parents into Enron's web, too. They tried to set up Lea's father, Jack Weingarten, as an equity investor in an Enron partnership, according to the original six-count indictment filed against her in April 2003. An Enron attorney blocked the investment, calling it a conflict of interest, but Enron paid Weingarten a breakup fee. Lea later told her father's accountants that the fee was interest on a loan to Kopper, the indictment says. Weingarten wasn't accused of wrong-
doing.
Meanwhile, Andrew's father directed the nonprofit family foundation, whose principal cash came from a $4.5 million payment in 2000 from Southampton Place, a partnership that prosecutors say was set up by Fastow to profit from Enron partnership deals.
People who have talked to the Fastows in recent months say the couple still believe they did no wrong. They see themselves as victims.
By participating in the fraud, even tangentially, Lea Fastow forfeited the right to control her atonement. She entered a world where, perhaps for the first time in her life, she doesn't get to make the rules.
Does her sentence seem overly harsh? Sure. Is the judge using her to send a message, just as the prosecutors used her as leverage against her husband? Of course.
No deals are guaranteed. If tax fraud simply becomes a negotiated vacation — "OK, I'll do five months, but I'd like to have the corner cell with the view of the garden, and I'd like to be home before the kids start school in the fall" — then it becomes a predictable risk, a cost people can calculate. Knowing the price, some would simply pay it to get rich.
We can be sympathetic to the Fastows. Hittner's hard line at every turn makes us think of the family, of the children, and the consequences they must bear for their parents' bad judgment.
The judge, though, is sending a message to the rest of us, too, about the nature of fraud and the dangers of complacency. It's far easier to get sucked into schemes like Enron than most of us want to believe. And the time to make choices is before it happens, not before the judge.
Lea Fastow's incarceration will be hard on her, her family and, of course, the kids. That's something she should have considered when she was signing her tax returns.
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