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HOUSTON � Michael Ramsey, Kenneth Lay’s criminal defense attorney, hammered hard on witness Andrew Fastow’s credibility and honesty during his cross-examination Monday of Fastow, the former chief financial officer of Houston’s Enron Corp. who has pleaded guilty to two criminal charges in connection with the investigation into the tragic collapse of the former high-flying energy company. Under persistent questioning from Ramsey, Fastow admitted several times that he lied to Lay and others and stole from the company. “I stole on my own behalf and on behalf of others from Enron and did lie,” Fastow testified during his fourth day on the witness stand in the criminal trial of former Enron Chairman Lay and former Enron Chief Executive Officer Jeffrey Skilling. Fastow testified that from 1997 through 2001, he “fooled” Lay, Skilling, Herbert “Pug” Winokur, the former chairman of Enron’s board of directors, and others. “With regard to certain things I had all of those people fooled, yes sir,” Fastow said. During his cross-examination, Ramsey came back again and again to Fastow’s credibility. “You had been stealing and getting away with it since 1997?” Ramsey asked Fastow during the afternoon session of the trial. “Yes, sir,” Fastow answered. “And lying like a dog about it?” Ramsey continued. “I was lying about it,” Fastow testified. Ramsey asked Fastow to identify the “magic day” when he stopped lying about Enron. Fastow testified that it was the day he entered into his plea deal with the Enron Task Force’s federal prosecutors. Fastow admitted during testimony last week to stealing millions from Enron in connection with the LJM entities, some off-balance-sheet partnerships he operated that were designed to help Enron keep troubled assets off its balance sheet. In 2004, Fastow pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit wire and securities fraud and awaits sentencing. His plea deal calls for a 10-year sentence. At a speech in December 2005 to businesspeople in Houston, Lay spent much of his talk criticizing the tactics of the Enron Task Force, and he blamed many of Enron’s problems on what he called the criminal activities of Fastow. But Fastow told Ramsey Monday that he was not in court to testify against Lay. “I’m here to testify truthfully to what I am asked. That’s the only reason I am here,” Fastow said. Skilling’s lawyer, Daniel Petrocelli, who initially told U.S. District Judge Sim Lake of Houston that he had finished his cross-examination on March 9 but came back with more questions Monday, questioned the validity of the so-called “global galactic agreement,” which was Fastow’s handwritten list of side deals between Enron and the LJM entities. Those side deals detailed guarantees from Enron that LJM would not lose money on particular transactions. Fastow testified that he created the two-page global galactic agreement in mid-2000 and added a third page in September 2000. He testified he was positive that the initials on the agreement were those of Rick Causey, former Enron chief accounting officer. Fastow testified earlier in the trial that Causey told him that Skilling had approved the global galactic agreement, but only Causey had initialed it. Fastow has testified that he destroyed the original list, but his wife, Lea, found a copy of it in a safety deposit box. Causey pleaded guilty Dec. 28, 2005, to securities fraud. His plea bargain calls for an 84-month sentence. “Any possibility you re-created the list?” Petrocelli, a partner in O’Melveny & Myers in Century City, asked Fastow. “No, sir,” Fastow replied. Ramsey, a solo practitioner in Houston, also asked Fastow if he was exaggerating any of his testimony in an attempt to make the federal prosecutors on the Enron Task Force think better of his performance during the trial. “My job is to tell the truth here, not exaggerate it,” Fastow said. Under questioning from Ramsey during the early afternoon, Fastow said he lied to lawyers from Vinson & Elkins who prepared a report for Lay in the fall of 2001 that looked into allegations about financial irregularities at Enron. Those issues were raised by Sherron Watkins, then a vice president for corporate development at Enron who met with Lay in August 2001 to raise her concerns. Fastow says he was not truthful to V&E lawyers because, “I had done wrong things and I didn’t want them to come to light.” Brenda Sapino Jeffreys is a senior reporter with Texas Lawyer, a Recorder affiliate based in Dallas.

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