Causey Heads To Prison for Role in Enron
Wednesday, January 3, 2007
HOUSTON, Jan. 2 -- Richard A. Causey, Enron's former chief accounting officer, was on his way Tuesday to a federal prison in Bastrop, Tex., to begin a 5 1/2 -year sentence for his role in the fraud that destroyed the company.
Causey, 46, pleaded guilty to one count of securities fraud in December 2005, less than a month before he was to stand trial with former Enron chief executives Jeffrey K. Skilling and Kenneth L. Lay, both of whom were found guilty.
"A lot of improper things were done at Enron," Causey said as he was sentenced in November. "Some of those were done by me, and for that I am profoundly sorry."
Causey was the last of 16 former executives to plead guilty to crimes at Enron, which was the world's largest energy-trading company before it went bankrupt in December 2001 as widespread accounting fraud came to light.
More than 5,000 jobs and $1 billion in employee pensions were wiped out when Enron collapsed. Investors are suing to recover more than $30 billion.
Causey was assigned to the prison he requested. Bastrop is three hours from his home in Houston, where Enron was based, and 30 miles from Austin, where the oldest of his three children attends college.
The Bastrop prison has a low-security section, surrounded by a razor-wire-topped double fence, and an unfenced minimum-security camp. Authorities would not say which one Causey is assigned to. With time off for good behavior, he can expect to serve four years and nine months.
Causey will be assigned a job such as groundskeeping or kitchen work, paying 12 to 40 cents an hour. He can apply for a job that pays 23 cents to $1.15 an hour in a prison factory that retrofits vehicles for the government, said Michael Truman, a spokesman for the U.S. Bureau of Prisons.
At his sentencing, Causey asked U.S. District Judge Simeon T. Lake III for leniency, saying his withdrawal from the case let prosecutors to ignore accounting charges and focus jurors' attention on securities-fraud charges against Skilling and Lay.
Causey agreed to serve seven years as part of his plea. Lake sentenced him to nearly all of it after prosecutors sought a reduction of three to six months. They called Causey's cooperation too little, too late.
"A witness who is reluctant to acknowledge his own responsibility is of no use to the government," prosecutor Kathryn H. Ruemmler said at Causey's sentencing. "Without Mr. Causey's implicit consent and explicit conduct, the fraud that occurred at Enron could not have occurred."
Causey's lawyer, Reid H. Weingarten, said later that Enron was "reputed to be the worst accounting scandal in history, but the only accountant inside or outside the company who will get a prison sentence is Rick Causey."
Causey forfeited $1.25 million in illegal gains in addition to being sent to prison.
Weingarten said Tuesday that he could not confirm whether Causey had reported to the prison.
"I have no reason to assume it didn't happen because I would have heard if it was otherwise," said Weingarten. Representatives of the U.S. Bureau of Prisons were not immediately available for comment because of a federal holiday.
Skilling was convicted in May of 19 counts of conspiracy, fraud, lying to auditors and insider trading. He is serving a 24-year prison sentence in Waseca, Minn. Lay, convicted of 10 counts of fraud and conspiracy in the same trial, died of heart disease before he could be sentenced. His guilty verdict was erased under a U.S. legal principle that cancels a conviction if the defendant dies before he can appeal.