Enron official pleads guilty, agrees to testify
By Carrie Johnson
Washington Post
WASHINGTON — A top official in Enron Corp.'s investor relations unit pleaded guilty yesterday to a criminal charge of insider trading and settled a related civil complaint, giving investigators another witness in their high-profile probe of the company's former leaders.
Prosecutors said Paula Rieker made $629,000 by selling 18,380 shares of the Houston energy company's stock shortly after she learned Enron's Internet broadband unit was about to announce enormous losses in July 2001.
Rieker also "aided and abetted" unnamed Enron executives in dispensing phony information to analysts about the company's financial condition for the first half of 2001, according to court papers filed by the Securities and Exchange Commission.
Rieker, 49, could face 10 years in prison, but probably will be given less time in exchange for her cooperation. To settle the SEC charges, Rieker agreed to return $499,333 in profits, interest and civil penalties and to be barred from serving as an officer or director of a public company. She also will return to Enron $130,000 in bonuses she received as an inducement to remain with the company after it filed for bankruptcy protection in December 2001.
Rieker attended meetings, drafted press releases and listened in on conference calls between Wall Street analysts and Enron's former chief executives.
Jeffrey Skilling, who presided over Enron during several of the analyst calls and meetings described in yesterday's court filings, awaits trial on 35 fraud and insider trading charges, including some related to Enron's Internet broadband unit. Daniel Petrocelli, Skilling's lead trial counsel, vigorously has disputed the allegations.
Enron founder Kenneth Lay, who became chief executive again after Skilling resigned suddenly in August 2001, has not been charged with wrongdoing. But government lawyers continue to probe what he knew about Enron's deteriorating finances while encouraging employees and outsiders to buy company stock, which he once called a "bargain." A spokeswoman for Lay declined comment yesterday.
