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Enron Broadband Trial Imminent

Five former Enron executives who worked at the defunct broadband services unit are set to go to trial on a range of charges levied by the Department of Justice.


The search for a jury began Monday, the Houston Chronicle reported. Executives from Enron Broadband Services Inc. (EBS) are accused of 170 counts of conspiracy, wire and securities fraud, insider trading and money laundering in the case, the newspaper reported.


The Houston Chronicle said the executives to be tried include: Joe Hirko, former co-CEO of EBS; Scott Yeager, former senior vice president of business development for EBS; Rex Shelby, former senior vice president of engineering and operations for EBS; Kevin Howard, former vice president of finance for EBS; and Michael Krautz, former senior accounting director for EBS.


The pending trial is among a slew of cases the federal government has brought against telecommunications and Internet executives during an era marked by high-flying stock prices, accounting fraud and other corporate malfeasance.


In 1999 and 2000, Enron let Wall Street know it was leading an initiative to revolutionize how capacity was bought and sold on networks that had cost billions to construct.


Analysts were impressed.


The Houston energy giant even said it had the ability to link with every network in the world, according to the Securities and Exchange Commission. But the SEC alleges the network simply could not do all the things Enron claimed, including bill telecommunications carriers for only the bandwidth they used.


Less than three years after announcing its broadband network was complete and ready for business, Enron restructured its broadband unit. Two months later, the company filed for bankruptcy, which marked the largest reorganization in U.S. history prior to WorldComs bankruptcy.



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