Steve Jobs is an ideas guy. He wears jeans, grows beards and orates to cheering throngs at events like this week’s MacWorld conference.

Jobs’ biographers say evidence indicates that he’s a pescetarian. He went to India. He takes only $1 a year in salary. And he leaves it up to other people to award him hugely valuable piles of stock in Apple Computer, where he’s the CEO.

People like Wendy Howell, the former in-house Apple lawyer responsible for option paperwork, probably won’t be attending Jobs’ eagerly awaited MacWorld speech Tuesday. Late last year, she became the lone person to lose her job as a result of the company’s well-publicized options problems.

Howell’s name hasn’t been publicly mentioned in the Apple options mess, and her firing wasn’t disclosed by the company in its series of public disclosures of options problems.

But she was the person who filled out the paperwork on a 2001 option award to Jobs that has grown infamous since just after Christmas, when Apple acknowledged that the value of the grant was artificially pumped up via a set of fabricated meeting minutes.

Howell’s role was detailed by various people familiar with the situation, all of whom refused to be named because of the federal government’s ongoing criminal and regulatory probes of Apple.

As the person who wrote out those “minutes,” Howell has become a central figure in the Apple probe � both as a potential defendant in a fraud case and as someone who could tell the government who at the company knew about backdating and its financial and legal implications.

Reached Thursday, Howell’s lawyer, white-collar defense specialist Thomas Carlucci of Foley & Lardner, didn’t seem ecstatic about the prospect of seeing his client’s name in print. He would not comment on whether his client was a target.

Of course, there’s more to Apple’s options problem than what went on in the legal department. So while prosecutors discuss whether Howell is more valuable as a witness or a target, their colleagues in the Securities and Exchange Commission are trying to parse the specifics of how Apple accounted for thousands of options grants � and whether executives knew that the law required backdated grants to be recorded as expenses.

The company has publicly said that while Jobs knew about the backdating, he didn’t benefit from it or understand the accounting implications.

And last week, a lawyer for Fred Anderson, Apple’s former CFO, released a prepared statement that his client “did not play any day-to-day role in the granting, reporting, and accounting of stock options and he was not involved in any knowing manipulation of the process.”
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But analyzing the accounting of options is an esoteric pursuit, and people familiar with the Apple case say Anderson could be facing indictment � a concern big enough to warrant the hiring of a “crisis communications” specialist this week to speak on his behalf.

FLIGHT PATH

Howell’s trajectory into backdating ignominy is as unlikely as the route that Jobs, a first-semester college dropout, took to becoming the personification of a wildly successful tech company.

Howell graduated from the John F. Kennedy University School of Law in Walnut Creek, a school unaccredited by the American Bar Association, and passed the bar in 1996.

She soon found herself in the legal department of floundering Apple Computer, a company in such rough shape that it was having a tough time finding in-house lawyers.

But it didn’t take long for it to become clear that Howell’s timing was lucky: In 1997, Apple acquired Next, the company that Jobs founded after leaving Apple in 1985. The merger saw Jobs return as CEO, leading the company to remarkable success while bringing close associates to executive and board positions.

Howell eventually took over the responsibility of options administration. When her direct supervisor, Michael Wyatt, left in 2000, Howell � who had been practicing law only four years � found herself as one of the only corporate lawyers left in the department, and began reporting directly to General Counsel Nancy Heinen.

That was the case through the end of the tech boom and the ensuing bust cycle, which flooded the job market with more experienced corporate attorneys who would’ve been happy to have Howell’s job.

It was in that atmosphere that someone decided to grant Jobs a pile of backdated options � and it was up to Howell to fill out that paperwork, which, according to people familiar with the case, included writing up minutes for a board meeting that never happened.

HITTING THE FAN

Howell continued working at Apple through a serious personal crisis in 2005 and the spring 2006 firing of Heinen � which came, according to people with knowledge of the situation, after a disagreement between the GC and Jobs unrelated to the backdating.

Heinen has been represented by Cristina Arguedas, of Arguedas, Cassman & Headley and by Miles Ehrlich of Ramsey & Ehrlich since shortly after Apple’s internal probe into backdating was launched.

Also around the beginning of that probe, Howell’s role regarding options came under close scrutiny.

She went on leave over the summer, said people with knowledge of the situation and, sources said, was eventually terminated as a result of the investigation. Howell’s role has since been detailed to the San Francisco federal prosecutors and SEC lawyers investigating the case, said people with knowledge of the investigation.

It’s not clear what the government will decide to do with that information. While they could decide to bring a case against her, it’s unlikely that prosecutors would bring criminal charges in such a high-profile case if they were limited to a non-executive employee.

That sets up a tense dynamic for the prosecutors and the subjects of their investigation. Whereas Howell will probably try to extricate herself by saying superiors ordered her to fabricate filings, those superiors, said people familiar with the case, are certain to argue that the wrongdoing was limited to Howell, who, as an attorney, would be expected to know that faking documents is illegal.

The other question is the extent to which prosecutors and SEC regulators will look beyond the legal department in an attempt to bring charges.

Anderson’s crisis management specialist, Paul Kranhold, referred a request for comment to the earlier prepared statement by Anderson’s lawyer, Jerome Roth of Munger, Tolles & Olson. And George Riley, the O’Melveny & Myers partner representing Apple, was even less loquacious about the case. “I have no comment at all,” he said.

Nor did Mark Pomerantz, the Paul, Weiss, Rifkind, Wharton & Garrison partner who, several people with knowledge of the investigation said, represents Jobs.

A GATHERING STORM

People with knowledge of the Apple probe say they expect it to gain steam over the next few weeks, and that if the prosecution team � mainly Assistant U.S. Attorney Christopher Steskal and his supervisor, Eumi Choi � were to file charges, it could happen within the next two months.

But that could change because in most of the options cases, defendants have been willing to sign tolling agreements, which prolong the statute of limitations to give prosecutors extra time to investigate, extending the time targets have to persuade prosecutors not to indict.

As they move forward with their probe, the prosecutors will have to weigh several considerations: Is Apple’s assertion that Jobs knew about backdating, but wasn’t aware of its impropriety, plausible?

And is it possible that someone in Howell’s position could � or would � backdate grants to benefit executives without her superiors knowing?

In arguing no, it’s likely that her lawyer, Carlucci, will use as a defense Howell’s lack of experience � in contrast to the defense that her superior’s lawyer has offered.

“Nancy Heinen has got 20 years of her reputation to stand on, period, and I’ll put that up against any innuendo or rumor any time,” Arguedas said.