Andy Fastow, the former CFO of Enron, has been released from prison according to CNNMoney. He will be in a halfway house for the rest of the year.
While there he will be able to take a job in the outside world (anyone need a brilliant CFO?), but will still be pretty restricted.
While Fastow — who was really the architect behind all of Enron’s special purpose vehicles — is out, Jeff Skilling is just in the beginning years of a 24-year sentence. Ken Lay, of course, died before he had to go to prison.
A 2002 Time story gives a taste of Fastow’s role at Enron:
There is nothing inherently sinister about special-purpose entities, and Enron’s initial investors did well because the deals were straightforward. CalPERS, the California state pension system and one of the nation’s largest institutional investors, put $250 million into an spe called jedi i, which invested in natural gas projects. CalPERS got back $433 million, a spiffy 73% return over four years.
When Fastow and Skilling went back to CalPERS in 1997 with jedi ii, the natural gas projects had been replaced by unspecified energy projects. CalPERS pulled out of jedi ii in October 2000 to invest in something simpler and more transparent, and Fastow scrambled to set up an entity to take its place. Known as Chewco, it was a partnership controlled by Enron employees, including Kopper. According to the Powers report, Chewco and similar partnerships were engaged in shuffling assets to cover losses and create illusory profits. As a result, Enron overstated earnings by $1 billion from the third quarter of 2000 through the third quarter of 2001.
In the end, he pleaded guilty to 78 counts of fraud.
(via Josh Brown)
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