The feds' investigation of Enron Broadband Services is a hint that former CEOs Ken Lay and Jeff Skilling are firmly in their crosshairs:
EBS is only one part of the multifaceted investigation, which includes such areas as improper power trades to boost prices in California and a 1999 energy trading deal with Merrill Lynch that helped Enron earn a $60 million profit.
But the new focus on EBS and other businesses also indicates that Skilling and Lay cannot be clearly linked to the complex partnerships that former Enron executive Michael Kopper admitted he created with former Chief Financial Officer Andy Fastow to siphon money into their own pockets, said Robert Mintz, a New Jersey-based attorney and former federal prosecutor.
Prosecutors will most likely find it easier to show that Lay or Skilling misrepresented the finances of the company than to prove they knew of the intricate accounting involved in the partnerships, Mintz said.
"Prosecutors must feel fairly certain they have their case against Fastow secured and are moving on to the bigger fish," said Mintz. "They're just trying to fit the missing pieces of the puzzle together."
Either a multicount indictment or plea agreement with Fastow is expected by the end of the month, say sources familiar with the case.