Ex-Enron Assistant Treasurer Pleads Guilty to Conspiracy - Halliburton, Merril Lynch Agents Involved

Note the relationships to Halliburton and Merril Lynch agents .... one huge racketeering operation

http://ap.tbo.com/ap/breaking/MGBGXVOZYZD.html

Ex-Enron Assistant Treasurer Pleads Guilty to Conspiracy

By Kristen Hays The Associated Press
Published: Oct 6, 2004

HOUSTON (AP) - A former Enron Corp. assistant treasurer has pleaded guilty
to conspiracy, admitting lying or withholding pertinent information from
credit rating agencies so the energy giant's financial picture appeared
healthier than it was.

Timothy DeSpain, 39, entered the plea Tuesday and has agreed to cooperate
with the government in ongoing Enron investigations. He is the 15th person
to plead guilty in the Enron investigation.

DeSpain told U.S. District Judge Ewing Werlein he complied with direction
from his bosses - Jeffrey McMahon in 1999 and early 2000 and then Ben Glisan
Jr. through November 2001 - not to discuss the extent of some shady
financing deals. Glisan and McMahon were treasurers for Enron, which
collapsed in December 2001.

He told the judge a 1999 deal in which Enron wrongly counted a sale of
treasury securities as cash flow was known to "the chief accounting
officer," who at that time was Richard Causey.

Glisan pleaded guilty to conspiracy a year ago and is serving a five-year
sentence. Causey has pleaded innocent to more than 30 counts of fraud,
conspiracy, money laundering and insider trading and is awaiting trial.
McMahon has not been charged with any crimes.

"I and others knew that maintaining an investment-grade credit rating for
Enron debt was critical to Enron's ongoing business operations," DeSpain
said in a statement filed with his cooperation agreement.

In exchange for his cooperation, DeSpain would not be charged with crimes he
may have committed with Enron or his subsequent employer, Halliburton Co.,
the agreement said.

He no longer works for Halliburton, and the cooperation agreement doesn't
refer to wrongdoing there. Halliburton spokeswoman Wendy Hall didn't answer
repeated questions about exactly when DeSpain worked at Halliburton, saying
only that he no longer works there and his case has nothing to do with the
energy services conglomerate.

DeSpain could receive up to five years in prison and up to a $250,000 fine
on the conspiracy to commit securities fraud charge. Sentencing was
scheduled for Feb. 18, but is likely to be postponed.

DeSpain answered to three treasurers during his tenure at Enron from March
1998 to mid-May 2002: McMahon, Glisan and Raymond Bowen.
Glisan replaced McMahon in March 2000 and is a key witness in the ongoing
fraud and conspiracy trial in Houston of four former Merrill Lynch & Co.
executives and two former midlevel Enron executives.

barges to Merrill Lynch at the end of 1999 to help Enron appear to have met
earnings targets. The government says the sale was really a loan because
Enron - specifically former finance chief Andrew Fastow - promised Enron
would find a buyer for or buy back the barges by mid-2000.

The defendants say Enron was never obligated to buy back or resell the
barges on that deadline.

Glisan sent an e-mail to others at Enron - not including DeSpain - in May
2000 reminding them that they had to ensure Merrill was bought out by the
next month. Glisan is expected to testify Wednesday in the trial.
McMahon initially pitched the sale to Merrill, but he isn't a prosecution
witness in the case.

McMahon replaced Fastow as CFO in October 2001 when the first of many
partnerships and financing schemes Fastow masterminded to hide debt, inflate
profits and enrich himself came to light. Bowen replaced Glisan in November
2001 after Glisan was fired for investing in one of Fastow's shady
partnerships.

In January 2002 McMahon moved up to president and chief operating officer,
and Bowen succeeded him as CFO.

Bowen resigned as treasurer and CFO on Friday. He has not been charged with
crimes.

DeSpain said he helped hide the true nature of a year-end 1999 deal, Project
Nahanni, in which Enron allegedly reported $500 million raised from a sale
of treasury securities as cash flow from operations. At the time, Enron was
seeking - and eventually got - an upgrade in its credit rating.

Also, DeSpain said he participated in so-called "prepay" schemes, in which
loans from banks were treated as income or cash flow for upfront payment for
later delivery of commodities.

"Enron's obligations under the 'prepay' transactions grew to approximately
$5 billion," DeSpain said in the statement. When Werlein asked who directed
him not to tell credit rating agencies about the shady prepays, he identified