Big Rowan Ackison (greensh) wrote,
Big Rowan Ackison

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Severity of Crime

One of my home bathroom reads is the oh so exciting "Enron: A Professional's Guide to the Events, Ethical Issues, and Proposed Reforms". I am learning about Andrew Fastow. He is known for implementing "asset-backed securities" - a system of raising capital by selling notes backed by risky loans. Based on his work, Fastow was hired in 1990 by Jeffrey Skilling at Enron Finance Corp. Fastow was named CFO at Enron in 1998.

The rest is history. Fastow used the asset-backed securities arrangements to move debt of of the Enron books and enrich his own accounts. In addition, Fastow "spread the wealth" by allowing others to gain large profits from small investments. In the end (from Wikipedia) Fastow was indicted by a federal grand jury in Houston, Texas on 78 counts including fraud, money laundering, and conspiracy. On January 14, 2004, he pled guilty to two counts of wire and securities fraud, and agreed to serve a ten-year prison sentence. He also agreed to become an informant and cooperate with federal authorities in the prosecutions of other former Enron executives in order to receive a reduced sentence.

Fastow's behavior contributed to the collapse of a company. A complacency on the companies auditors and board did 'help' the collapse. So, I am left to wonder if there is justice for people like Fastow. He ended up serving six years and gave up US$23.8 million in family assets. This was a "financial" crime, and a large pound of financial flesh was taken. Is the six years sufficient to the crime? A "common" crime like assault or drug selling would gain a longer sentence. I see so many signs that the powerful (wealthy) in this country protect themselves and "justice" is a luxury that only occurs when hands are forced. Hmmmm...

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