Ben Glisan, a former treasurer with Enron Corp., is moving toward cooperating with federal investigators probing the company’s collapse in exchange for immunity or a plea deal, sources said Tuesday.
The talks are preliminary, the sources emphasized. But Glisan has given investigators a proffer, which is a document outlining what information a witness could provide in exchange for lenient treatment from the government.
A bona fide catch
Glisan would be a logical figure for prosecutors to reach an agreement with in their investigation of the complex transactions of the sprawling energy company, and reaching a deal with him could mark a breakthrough in the case.
Investigators have been looking for a key inside witness to help build their case, and such an insider is often a critical piece of intricate criminal cases.
Glisan was at a high enough level in the company to be intimately familiar with its workings, but he is not one of the top figures prosecutors are trying to snare, such as former Chairman Kenneth Lay, former Chief Executive Officer Jeffrey Skilling or former Chief Financial Officer Andrew Fastow.
The Justice Department has let the congressional committees know that calling Glisan could interfere with their efforts, according to knowledgeable sources.
Ken Johnson, a spokesman for Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee who is leading the highest-profile congressional investigation of Enron, said federal investigators have spoken to the committee about Glisan.
“We have had discussions with the Justice Department about Mr. Glisan, but I can’t comment further since there is an ongoing investigation,” Johnson said. “Chairman Tauzin has made it clear from the beginning that we will do nothing to hamper the Justice Department investigation.”
Glisan’s attorney, Henry Schuelke, did not return a call seeking comment.
Ronald Allen, a professor at Northwestern University School of Law, said an individual like Glisan could be immensely helpful to investigators.
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“It is sort of a godsend when you can find a relatively high up, but not main player, who has not benefited as obscenely as others and thus may not generate hostility among jurors or among the citizens who may be watching,” Allen said. He said he is not familiar with what the government knows about Glisan.
“If he has not benefited obscenely, the blood lust will be less, both in terms of the government and in terms of the rest of us,” Allen said. “And he may not appear to be as involved in manipulations but may have substantial knowledge to get the real players.”
Glisan would seem to fit this bill in several ways. He has first-hand knowledge of the suspicious financial dealings at Enron, and his name appears repeatedly in the documents congressional investigators have gathered as they probe the Enron collapse.
Glisan, who is in his mid-30s, worked for Enron for about four years before being terminated last fall, when the company’s financial problems began to surface.
Glisan was a vice president and worked as an accounting executive for Enron, and in that position he had frequent contact with Fastow. Investigators say Fastow is the intellectual author of the partnerships that were to eventually destroy Enron, and documents suggest he recruited others to take part in the questionable transactions.
$5,800 becomes a million
In early 2000, Glisan was involved in an Enron partnership named Southampton, after an upscale Houston neighborhood favored by Enron executives. According to a special report prepared for Enron’s board of directors, Glisan put up $5,800 to join the partnership but “received approximately $1 million within a matter of one or two months.”
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The report added that “Glisan told us that Fastow never asked him for any favors or other consideration in return for the Southampton investment.” The purpose or business transactions of Southampton, however, have never been made clear.
As 2000 went on, Glisan presented several new partnership plans to the board of directors. The plans involved a business entity set up by Fastow named LJM2.
Internal company documents describe Glisan as “business unit originator” and “person negotiating for Enron” in the dealings with LJM2. At the same time, documents list Glisan as being a principal in LJM2, making him Fastow’s partner.
The purpose of LJM2 was to hedge some of Enron’s investment in the shares of high-tech companies, and also to buy assets and assume debt from Enron. The transactions had the effect of making Enron look more profitable than it was while hiding the company’s rising load of debt.