Houston (July 27, 2004) -- A memo detailing secret side deals between former Enron chief accounting officer Richard Causey and ex-chief financial officer Andrew Fastow has defense attorneys speculating that Causey might make a deal with the government, according to published reports.

The Houston Chronicle obtained a copy of the three-page handwritten memo, known to prosecutors as the "global galactic" agreement, which details seven secret side deals between Causey and Fastow. The document was cited as a written agreement in the indictment of ex-Enron chairman Kenneth Lay earlier this month.

The memo, which appears to be initialed on all three pages by Causey and Fastow, guaranteed Fastow-controlled LJM entities -- investment partnerships set up to do side deals with Enron -- as much as $50 million from Enron, which promised to buy back assets previously sold to the LJM partnerships or pay in some other way, the Chronicle reported.

In January, Causey pleaded not guilty to five counts of securities fraud and one count of conspiracy to commit fraud. Lay and ex-chief Jeffrey Skilling, who were accused in the same indictment as Causey, have also pleaded not guilty to all charges against them. Fastow in January pleaded guilty to two conspiracy charges and is cooperating with the government.

-- WebCPA staff

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