How the guiltiest man in corporate crime slipped away When Andy Fastow, former CFO of the Enron Corporation, made his original plea bargain with the government, it was already a generous deal. The mountain of evidence against Fastow would’ve almost certainly put him behind bars for the rest of his life, but after the agreement, he was held to only 2 of the 98 charges against him. Fastow agreed to forfeit nearly $30 million, including two estates, and serve the maximum 10-years in prison with no chance of reducing his sentence. While this was clearly an extreme concession by the government, most legal analysts grudgingly agreed it was worth it. In exchange, he offered up the prize catches, former Chairman Ken Lay and former CEO Jeff Skilling, by promising to testify against them. The government, desperate to find a foothold in their evidence-less case against Lay and Skilling, were willing to forfeit almost everything they had against the beaten Fastow in exchange for cooperation. Ten years in prison was meager punishment, but the case against Lay and Skilling would surely be lost without Fastow’s testimony. When Fastow was sentenced last September, however, things turned out a little differently. Ignoring the supposed caveats of the bargain, Fastow’s lawyers came out asking for a drastic reduction in the sentence. When Judge Kenneth M. Hoyt heard Fastow’s new plea, the court didn’t object, and instead embraced the turnaround, cutting his sentence to only six years. In fact, by participating in a drug rehabilitation program to treat his mild use of anxiety pills, Fastow could be free and clear in as little as three and a half years. This sentencing not only injures the faith in the legitimacy of cooperative testimony, but it also serves as an embarrassing example of the justice system’s inability to prosecute white-collar crimes. Supposedly, the reason Fastow would not have a chance to reduce his sentence was to lend credibility to his testimony. Those who cooperate are always considered less trustworthy on the stand, as they have incentive to exaggerate the wrongdoing of others in order to reduce their own sentences. With that in mind, Fastow’s 10-year deal was set in stone to strengthen his testimony, which comprised the bulk of the government’s case against Lay and Skilling. At the time of Fastow’s actual sentencing, his testimony had already led to the two convictions, and the jury had heard Fastow’s testimony believing his sentence was at a fixed 10 years. Why, then, would the judge cut the sentence nearly in half after the Lay/Skilling trial was over? It seems the government only maintained their original agreement long enough to lend credibility to Fastow’s claims. Maybe the government cut a private deal with Fastow, promising a shorter sentence if his testimony led to convictions, encouraging unjust and misleading testimony. Regardless of the true motives, the government simply can’t stand by the breaking of agreements made with white-collar criminals. On a broader scale, the sentencing displays a disturbing imbalance in white collar crime. Fastow will spend a maximum of six year in prison, despite playing what many consider the most egregious role in all of Enron. His hand in the scandal simply can’t be overstated. While Fastow was charged with 98 separate counts of wrongdoing, Lay and Skilling combined only faced 34. Fastow’s profit from illegal activities alone was estimated near $50 million, and the mountains of evidence were indisputable. In contrast, the only evidence against Jeff Skilling was the testimony of Fastow and others who cut a deal with the prosecution. Skilling was convicted on 19 out of 28 counts, sentenced to over 24 years in prison, and fined $45 million. In fact, much of Skilling’s wrongdoing stemmed from the jury’s ruling that he knew more about Fastow’s dealings than he made public, thereby punishing the negligent witness to crime instead of the criminal. But why this trade-off? Fastow was clearly the more culpable defendant, but Skilling’s status as former CEO and local fame made him a much more appealing target. The ruling’s message seemed clear: it’s OK to commit crime, even with overwhelming evidence, so long as you can help convict a bigger fish. Fastow’s punishment is embarrassingly meek, showing disturbing gaps in the government’s ability to prosecute corporate crime. In the end, they gave the most clearly guilty man a sentence comparable to that of an average drug violation, despite the thousands of lives destroyed by his conscious decisions. Worse than that, the government’s generous compromises have done little to deter future executives from corruption.   Interested in making your own deal? E-mail Matt at m-cohlmia@northwestern.edu.