Friday, July 15, 2005
DOJ reports here that "Christopher Calger, a former Enron vice president, has pleaded guilty to a charge of conspiracy to commit wire fraud." According to this press report, this is the 16th conviction of the Enron Task Force. According to the DOJ press release, it states in part that:
"The information and plea documents signed by Calger state that he was a vice president in charge of the West Power Origination group of Enron North America (ENA). In that capacity, he supervised employees who negotiated the sale of an ENA project known as Coyote Springs II (CS2) to a subsidiary of Avista Corp. The CS2 project consisted of an equity interest in a power plant, a construction contract to build the plant, and a turbine to be placed in the plant. Calger admitted that he and others engaged in a scheme to recognize earnings prematurely and improperly. Specifically, Enron’s auditors would not allow Enron to recognize immediate gain on the turbine sale unless that sale occurred at least two weeks before the equity sale in the plant (the “equity interest”) and the signing of the construction contract."
Perhaps one beneficial side-effect to the recent "lock-em-up for life" approach being taken by the courts in white collar cases, is that more individuals may wish to cooperate with the government in return for reduced sentences. Not that this might have been a motivation in this recent plea, the timing is interesting to note here. The negative side for the government will likely be that defense counsel will now have sharper cross-examinations against the co-operators in asking these individuals questions about what penalties they may have faced if they failed to plead and assist the government.