Enron exec’s wife trades high life for prison time

Lea Fastow to begin sentence today

? For the next year, home for the real estate and grocery heiress married to Enron’s former finance chief will be an 8-foot-by-10-foot cell. She’ll live with a roommate, share a toilet and endure noise that doesn’t stop at lights-out.

Today Lea Fastow must report to the federal lockup in downtown Houston, where she will serve a year for her misdemeanor conviction of signing a fraudulent tax return to help her husband, Andrew, hide ill-gotten income from schemes that fueled the energy company’s crash.

The family home is a $696,000, two-story brick home in the affluent Southampton neighborhood. When Andrew Fastow pleaded guilty in January, he agreed to surrender $23.8 million in cash and property, including two vacation homes in Galveston and Vermont.

But that life is a world away from the federal detention center, a gray, 11-story building where the only chance to go outside is during brief and rare outings on the roof. She’ll probably prepare food or wash bed sheets for less than 50 cents a day.

“She’ll spend the vast majority of her time indoors under fluorescent lights,” said David Novak, a former Microsoft consultant who served a year in a federal prison for mail fraud. Now he runs a consulting service in Salt Lake City, helping other federal prisoners prepare for life on the inside.

The Fastows’ guilty pleas were a breakthrough in the 2 1/2-year investigation into the scandal that led to the energy giant’s collapse. Both are cooperating in the prosecution of other former Enron executives.

Last week, Enron Corp. founder and former chairman Kenneth Lay became the 30th and highest-profile individual charged.

Even before her marriage to Andrew Fastow, Lea Weingarten was well-to-do, an heiress to a grocery and real-estate fortune amassed by one of Houston’s old-line families.

At the detention center in Houston, a narrow locker will hold the few books, photos and other personal belongings she’s allowed to have. She will wear prison-issue tan uniforms, and her mail could be read first by prison staff.

Fitting in

Lea Fastow, left, wife of former Enron Corp. chief financial officer Andrew Fastow, leaves the federal courthouse in Houston with her attorney, Nanci Clarence, in this May 1, 2003, file photo. Lea Fastow must report today to the federal lockup in downtown Houston to start serving 12 months on her conviction of signing a fraudulent tax return to help her husband hide ill-gotten income.

“Once you’re in that environment, you have to decide, ‘Am I going to sink or swim?’ Most of us learn how to swim,” said Vanessa Leggett, a writer who was jailed at the Houston facility for nearly five months in 2001. She was sent there after she refused to surrender her research for a book she was writing about a former bookie charged with arranging his wife’s death.

Leggett, like Lea Fastow, is educated and well-off. But in the federal detention system, where most prisoners are serving sentences for drug crimes, everyone’s on a level playing field, she said.

“Status is from the outside looking in. There’s not really that consciousness on the inside,” Leggett said. She said Lea Fastow should have few problems if she kept to herself and respects others.

Small role in Enron case

Lea Fastow wasn’t accused of masterminding shady partnerships or financing schemes that led to Enron’s collapse. Although she had been assistant treasurer, the schemes largely were hatched after she quit Enron in 1997 to be a full-time mother.

She was indicted on six felony tax and conspiracy charges in April 2003, about six months after her husband’s initial indictment on what grew into 98 counts of conspiracy, fraud, insider trading and other charges.

She pleaded guilty to a charge of signing tax forms she knew didn’t include ill-gotten income from her husband’s schemes. She also admitted she endorsed and deposited checks of ill-gotten gains disguised as gifts written to their sons.

Her lawyer said Lea Fastow helped persuade her husband to plead guilty to two counts of conspiracy, and agree to a 10-year sentence.

But the judge balked at a plea agreement that would have given Lea Fastow five months in prison and five months confined at home, and he imposed the maximum sentence allowable.