For Fastow in particular, the Kopper guilty plea could spell serious trouble.
The New York Times reported on Wednesday that Fastow's attorneys have, on several recent occasions, asked other witnesses in the case what they remembered about Kopper's attendance at certain meetings and statements Kopper made regarding Enron.
The Times also reported that while Kopper and his domestic partner earned $12.6 million on their $125,000 investment in Chewco, Fastow arranged to pay them another $3 million last fall -- just as Enron's financial house-of-cards was beginning to teeter. The payment was reportedly arranged several months after Kopper had already resigned from Enron.
According to The Times, Fastow ignored warnings from Enron lawyers that the company was under no obligation to pay Kopper. In January, Kopper and his domestic partner, William Dodson, apparently sold their Houston home to Fastow's parents, and Fastow financed the $850,000 mortgage.
Observers note that, in other recent cases of alleged corporate malfeasance, such as WorldCom Inc. and Adelphia Communications Inc., government prosecutors have immediately gone after top officials at those companies. But in the Enron case, investigators appear to be following a more traditional tack - that is, gathering incriminating evidence against low-ranking and mid-level managers and then pressuring them to roll over on their former bosses.
Kopper could prove to be key in any indictments leveled against Fastow, Lay, or Skilling. Since leaving Enron under a cloud last October, Fastow has remained silent about his time at the once-powerful Houston energy specialist. He declined to talk to CFO about his involvement in Enron's off-balance sheet investments.
(Editor's note: To read more about Fastow's involvement with Enron's special purpose entities, see "What Andrew Fastow Knew.")
Survey: CFOs' Jobs Getting Tougher
In a survey of 265 CFOs of large U.S. based companies, 63 percent said they are saddled with inadequate budgeting, forecasting, and decision support IT systems. The survey, "CFOs: Driving Finance Transformation for the 21st Century," which was conducted by Cap Gemini Ernst & Young and CFO Research Services (an affiliate of CFO.com), found that finance chiefs felt pressured by the current weak economy and the greater demand for accurate financial reporting in the wake of this year's accounting scandals. At the same time, CFOs say they are under pressure to demonstrate a positive return on investment.
The survey also found that 59 percent of the respondents said they need more support from senior management to transform their departments, and 56 percent cited a need to acquire new technology. According to the survey, CFOs believe the active support of the CEO and the board of directors is crucial to transforming the finance function. Gaining this support will call for creating business cases with built-in metrics to gauge the results of the transformation.
Gates: Microsoft Won't Expense Options
Microsoft Chairman Bill Gates told the The Toronto Globe & Mail this week that the software giant has no plans to expense options. Gates told the newspaper that he understand that companies from other industries were expensing employee stock options. But as long as other technology companies were not expensing them, Gates said it wouldn't make sense for Microsoft to change its practice.
"There's still some questions about what's going to happen in the technology industry, [but] if you want to compare us with other people in our industry, the accounting should be done the same way," Gates told The Globe & Mail. "We'll be consistent with the industry."
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