Key Enron witness ‘duped bosses’

Defence lawyers acting for former Enron boss Kenneth Lay have accused a chief witness against him of helping to bring about the US energy giant’s collapse.

Former finance chief Andrew Fastow lied to his bosses at Enron while stealing millions of dollars from the bankrupt firm, Mr Lay’s defence attorney said.

Mr Fastow was facing cross-examination after giving evidence against Mr Lay and fellow Enron boss Jeffery Skilling.

Defence lawyer Andrew Ramsey told a court in Houston that Mr Fastow duped his bosses into thinking Enron was financially strong, while at the same time sowing the seeds of the company’s demise.

“You were very proficient at looking him [Mr Lay] right straight in the face and telling him you were loyal and he could count on you, but you knew in your heart you were stealing from the house,” Mr Ramsey said.

“You were successful in your lying and your deceit from 1997 all the way up to 2001.”

Mr Fastow, who has pleaded guilty to fraud charges and agreed to help prosecutors in exchange for a reduced 10-year jail sentence, admitted that he had “fooled” staff at Enron.

Mr Lay had claimed that Enron’s finances were robust in a Business Week interview in August 2001, despite being aware of mounting problems, prosecutors said.

“It was what Mr Lay was saying. It was a lie,” Mr Fastow told jurors.

However, Mr Lay’s lawyers attempted to discredit Mr Fastow’s evidence, arguing that he had only decided to co-operate with prosecutors after realising he faced “200 or 300 years in jail”.

“Can you think of one reason why your testimony should be deemed credible,” Mr Ramsey said on Monday.