Top Enron aide set to admit criminal charges

A top lieutenant to Enron’s former chief financial officer will today plead guilty to criminal charges, sources close to the investigation in the US said.

It will be the first admission of guilt by an executive of the fallen US energy giant.

Michael Kopper, former managing director of Enron Global Finance, plans to enter guilty pleas in Houston to single charges of conspiracy to commit wire fraud and money laundering, two sources said yesterday.

He will also turn over $12m (€12.2m) in illegally obtained assets, according to one of the sources.

Kopper, aged 37, was a deputy to ex-chief financial officer Andrew Fastow. He became a focus of investigators because of his involvement in Enron-financed partnerships, accounting devices that allowed the company to shift debt and other liabilities off its books.

As part of the plea agreement, Kopper has agreed to cooperate with investigators, a potential watershed event in the investigation since he has knowledge of Enron’s innermost workings and financial dealings.

The plea is the first outward sign of progress in the Enron investigation.

One of the sources said the plea offers no guarantee that prosecutors will not seek prison time for Kopper.

Millions of the Houston-based company’s investors lost money and thousands of current and former Enron workers lost the great bulk of their retirement savings when it filed for bankruptcy last December.

It also led to the unravelling of Arthur Andersen, the auditing firm convicted of shredding documents to obstruct a US Securities and Exchange Commission investigation of Enron’s accounting practices.

The firm lost hundreds of clients and is shutting down its auditing practice at the end of this month.

Enron’s collapse put the Bush administration in an awkward position. President George W Bush has received more than $550,000 (€559,000) from Enron, its employees and their relatives during his political career - the most from any source.

He is also a friend of former chief executive Ken Lay.

Enron’s partnerships were largely financed with Enron stock, even though they were supposed to be independent.

An internal Enron investigation concluded that some of the partnerships, created by Fastow, were used to hide debt and inflate Enron’s profits.

US government investigators are looking into whether Enron managers, from Mr Lay on down, knew that the network of partnerships was being used to conceal huge debts.