Legal Commentary

Maintaining Enron myths

By Tom Kirkendall

Ever wonder how the mainstream media maintains Enron-related myths?

In reporting on the sentencing hearing later this week in the Enron-related case of the three former UK bankers dubbed "the NatWest Three" (prior posts here), the Chronicle's Kristen Hays observes the following:

In their plea deals, the trio admitted they committed wire fraud in a scheme with Fastow and his top lieutenant, Michael Kopper, to cheat their former London employer, Greenwich NatWest. The bank, which is now part of the Royal Bank of Scotland, had a stake in a Fastow-created partnership and the three men advised their employer to sell that interest for $1 million when they knew its value had grown.

Fastow arranged for Enron to pay more than $19 million for Greenwich NatWest's stake and divided most of the cash among himself, Kopper, the British bankers and others.

Actually, as noted in this earlier analysis of the NatWest Three plea deal, the following is what the former bankers actually pled to:

So, after years of litigation, the NatWest Three pled guilty to a single count of wire fraud. The basis of the guilty plea is that the three bankers failed to disclose to NatWest the [$250,000] option that they had taken from Fastow to purchase a portion of NatWest's interest in Swap Sub at the time that NatWest sold that interest to Southampton [for $1 million]. Importantly, the basis of the plea deal is not that the NatWest Three knew and didn't tell NatWest that the value of the bank's Swap Sub interest was going to skyrocket soon after Southampton bought it as a result of Fastow completing the unwind transaction with Enron.

Read about the real NatWest Three deal.

Full post as published by Houston's Clear Thinkers on February 20, 2008 (boomark / email).