Enron - Merrill Lynch

By: Associated Press
By: Associated Press

Former Enron finance chief Andrew Fastow could be called to testify in the first criminal trial to emerge from the energy company's crash -- even though he is not a defendant or a prosecution witness.

Attorneys for four former Merrill Lynch executives and two former midlevel Enron executives could call Fastow in the conspiracy and fraud trial regarding an alleged sham sale of several barges to the brokerage in 1999.

Prosecutors say Enron desperately needed the barge deal to book a critical 12 (M) million dollar pre-tax fourth-quarter profit. But Merrill Lynch came through only after Fastow orally promised the brokerage that its seven (M) million dollar investment in three electricity-producing barges would be bought out within six months.

A partnership Fastow created to help Enron hide debt and inflate profits -- L-J-M-two -- came through in June 2000, buying Merrill Lynch's interest at a premium for seven and a half (M) million dollars.

The defendants contend Enron was never obligated to buy back or find another buyer for the barges.

Fastow is a cooperating government witness. He isn't on the prosecution's witness list in the barge case, but the government told defense attorneys he would be available to them if they want him during the trial, which enters its third week today.


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