Ex-Enron executive pleads guilty
By Kristen Hays
Associated Press
HOUSTON — Enron's former top investor-relations executive pleaded guilty yesterday to charges he helped paper over the energy company's shaky financial condition before its collapse.
Mark Koenig, 49, pleaded guilty to aiding and abetting securities fraud, which carries up to 10 years in prison.
"He has chosen to accept responsibility. He has chosen to cooperate with the government and move on with his life," said Koenig's attorney, Philip Inglima.
In a related civil action brought by the Securities and Exchange Commission, Koenig agreed yesterday to turn over to the government $1.49 million in forfeited assets and civil penalties and cooperate with government investigators.
As the head of investor relations, Koenig worked with former Enron founder Kenneth Lay and former chief executive Jeffrey Skilling, and served as the company's main link to investors and analysts. He oversaw the company's earnings announcements — exercises that proved fraudulent — and coordinated conferences with stock analysts.
Federal prosecutors said Koenig participated in and knew about efforts on the part of senior Enron management to fool investors into believing the company was more financially healthy before it collapsed in scandal in December 2001.
Lay, Skilling and former chief accounting officer Richard Causey face similar charges, and all three have pleaded innocent.
Specifically, prosecutors said Koenig knew that Enron masked losses by its retail energy unit by folding it into the division that included the company's trading unit. The government also alleged that Koenig participated in misleading analysts about profits in Enron's former Internet unit, Enron Broadband Services, when that unit never earned a dime. Both units went bankrupt along with the parent.
Six former broadband executives are slated for trial in October. The former CEO of the broadband unit, Kenneth Rice, pleaded guilty last month to securities fraud.
In May, Koenig's second-in-command, Paula Rieker, pleaded guilty to insider trading.
