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It’s the kind of executive compensation that, in retrospect, obviously seems too good to be true. In 2000 Kristina Mordaunt, then a senior in-house lawyer at Enron Corp., made $1 million after investing $5,800 in one of the company’s now-notorious schemes. But it’s her close relationships with ex- CFO Andrew Fastow and former managing director Michael Kopper-who invited Mordaunt into the lucrative deal-that probably interest federal prosectors the most. That’s the view of five criminal defense attorneys in Texas (some with Enron clients), as well as several in-house and outside lawyers for the company. Mordaunt, who was fired by Enron in November 2001 after she told GC James Derrick, Jr., about her extremely high-yield investment, has stayed out of the public eye for most of 2002. But she popped up in August, when prosecutors filed an information (a list of charges) against Kopper. In that document, the government indicated it would also go after various assets of several former Enron executives, including $1.67 million in two of Mordaunt’s bank accounts, her $356,000 house, and her husband’s 2000 Lexus. Defense attorneys and Enron lawyers who have been following the feds’ activities also wonder whether Mordaunt contributed to the highly detailed criminal complaint filed against Fastow in October. The complaint is based in part on statements from 11 confidential sources, including two former Enron employees who are listed as “nominee investors” for Fastow-a description that would fit Mordaunt. (A grand jury has since hit Fastow with a 78-count indictment.) If Mordaunt has indeed talked about her relationships with Kopper and Fastow, it wouldn’t be the first time. She gave at least two interviews in January 2002 to Wilmer, Cutler & Pickering attorneys who were assisting a special committee of Enron’s board of directors in the preparation of the Powers Report. That report looked at the transactions between Enron and the special-purpose entities allegedly created and managed by Fastow and other Enron employees. During her career at Enron, Mordaunt inspired envy and admiration. She came to the company in 1993 from the now-defunct Houston firm of Butler & Binion, where she did bond work and financings. In January 1999 she was promoted to general counsel of structured finance, and later that year became GC at Enron Communications (which subsequently changed its name to Enron Broadband Services). By August 2001 Mordaunt had accepted an offer to become general counsel for a corporate development group. In that job, Mordaunt told Wilmer, Cutler lawyers, she reported to Derrick, the company’s lead GC, and Fastow. Mordaunt’s standing was directly tied to her close professional relationship with Fastow. “I think Kristina was very committed to [Fastow and] Kopper,” an Enron in-house attorney says. Events also suggest that she was rewarded for that commitment. In her interviews with the Wilmer, Cutler lawyers, Mordaunt said that she was approached by Kopper in early 2000 about investing in a limited partnership that Fastow and Kopper were putting together to purchase an interest in one of the company’s special-purpose entities. Mordaunt said she agreed to participate after finding out she would have to put in less than $10,000, and after determining that she had no conflicts of interest with the deal. Mordaunt says she heard nothing more about her investment until May or June, when Kopper called for wire transfer instructions. She said she was surprised to learn that she had made so much money. She added that she didn’t know why Fastow had selected her to benefit from the lucrative investment. In her interviews with the Wilmer, Cutler lawyers, Mordaunt conceded that she should have asked more questions before investing. She said that “hindsight was 20/20, and no one would make the same investment today.” But she said she was never asked for-and never provided-anything in return for her profits. Though at press time there was no public word on whether Mordaunt had reached any kind of an agreement with prosecutors, outside observers say that she’s ideally placed to make one. “She would appear to be at the level where you would think they would be cutting deals,” says Daniel Hedges, a former U.S. attorney for the Southern District of Texas and a partner in Houston’s Porter & Hedges. Indeed, Mordaunt already may have a deal, speculates Christopher Bebel, a former prosecutor with both the SEC and the Justice Department. “She is the perfect candidate to be a government witness … because of her educational background and her familiarity with the underlying transactions,” says Bebel, a partner in Shepherd Smith & Bebel of Houston. Andrew Weissmann, an assistant U.S. attorney in New York and a member of the Justice Department’s Enron Task Force, declined to say whether Mordaunt is talking with prosecutors. Mordaunt and her attorney, R. Hayden Burns of Houston’s Burns, Wooley, Marseglia & Zabel, did not respond to interview requests.

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