Fastow got 6 years

"William Sansinger with a six month sentence..."

http://biz.yahoo.com/ap/060926/enron_fastow.html?.v=38

So in the Dylan song, William Sansinger killed poor Hattie Carrol, etc., etc., but really what did Fastow do, besides be the little scapegoat for Enron. Wait, I take that back what did Enron do exactly? Besides do some of the most ingenius financial engineering ever? Wait, let's take the flip side of the coin, what if Enron's stock kept going up, what if these special purpose entities had a net asset gain? (If you remember Enron used their call options on their own stock as an asset to pull debt off their balance sheet into these special purpose vehicles, they got investment banks and other investors to pay cash for these call options...it was basically brilliant structured finance). Did they go to far? Probably. Did Skilling and Lay know about it? Definately. Should Fastow be the villain they are making him out to be? No. People lose money in the market and look for someone to blame. Blame yourself, you big dummy.


Anyway, Fastow is a brilliant CFO. Jeff Skilling was a brilliant CEO. The only problem Skilling lacked was some discipline and moderation. Trading energy was a brilliant idea. Enron Online was a brilliant idea. Screwing up California? Stupid. Rebecca Mark traveling around the world building crappy power plants by ramrodding them through local governments? Stupid? The worst thing about the whole house of cards (I say that without taking anything from Fastow's brilliance) was that they couldn't let the stock go down because it would kill the special purpose entities which they needed to unload debt. So it perpetuated this crazy cycle, where they kept feeding the beast. Meanwhile, broadband and weather trading was just too early... and they kept throwing money at this trading platform idea. If they had put some controls on their traders, thing would have fallen in line, and the money they made there combined with being more disciplined about their new business investment process, would have kept their numbers in line.

Obviously, Enron went overboard and crossed some lines in terms of business. However, the amount of grey area that Enron and the market was operating in at this time was enormous. A more conservative company would have emerged. However, let's be clear, there was no fraud here. They just kept feeding the monster.

Was there incomepetence at Enron? Yes. Was their fraud enough to send a mother to jail for a couple years and her husband to jail for 6? NO.