Nov 24, 2006  |  By: LOU CHIBBARO J  | COMMENTS     

Michael Kopper, 41, the gay former Enron Corp. executive who became the first to plead guilty to financial crimes among the company’s top management, was sentenced Nov. 17 to three years and one month in prison.

Judge Ewing Werlein, of the U.S. District Court in Houston, also sentenced Kopper to two years probation and ordered him to pay a $50,000 fine.

The sentencing came four years after Kopper, who lives in Houston, pleaded guilty to two counts of conspiracy after he admitted that he and his domestic partner, William Dodson, stole about $16.5 million from Enron and its shareholders.

Kopper cooperated in the government’s investigation into the massive financial scandal that rocked Wall Street and resulted in Enron’s bankruptcy. The Enron collapse also resulted in the loss of millions of dollars to company shareholders and employee pension funds.

Although authorities forced Kopper to return $8 million to the government and to relinquish his rights to another $4 million through forfeiture proceedings, Dodson has been allowed to keep $9 million in funds that Kopper helped him obtain through Enron-related scams.

The fact that U.S. and Texas laws do not recognize same-sex relationships most likely prompted authorities against going after Dodson’s financial gains in the Enron affair, financial observers have said. Federal prosecutors forced the married spouses of several Enron figures to forfeit money they obtained in schemes operated jointly with Enron executives.

According to the Houston Chronicle and other media accounts, authorities have placed Dodson in the same “third party” category of individuals or entities, including churches and hospitals, that received tainted Enron money that the government won’t attempt to recoup.

Jaclyn Lesch, a spokesperson for a special task force at the U.S. Department of Justice that prosecuted the Enron defendants, including Kopper, declined to comment when asked why the government has not sought to recoup Enron-related proceeds received by Dodson.

Ironic twist

Alphonso David, a staff attorney for the gay legal advocacy group Lambda Legal Defense & Education Fund, said that if Kopper and Dodson were married, the Enron funds that now belong to Dodson would be considered jointly owned by the two men under the marriage laws of most states.

“It’s ironic that some of the same people who are opposed to legal recognition of marriage between same-sex couples are upset that this couple gets to keep about $9 million in stolen funds,” David said.  “This highlights the point that people don’t always think about the obligations as well as the rights that go with marriage.”

David said that if Kopper and Dodson were married, the Enron funds that now belong to Dodson would be considered jointly owned by the two men under the marriage laws of most states.

Enron’s declaration of bankruptcy in late 2001, due to the scandal, led to the layoff of thousands of workers and the loss of more than $60 billion in Enron stock, government authorities have said. Enron’s collapse also wiped out about $2 billion in employee pension funds.

Kopper’s sentencing came after he cooperated extensively with federal prosecutors. He is credited with helping the government secure convictions of more than a dozen top officials at Enron and Merrill Lynch, the financial firm charged with engaging in a “sham” purchase of property from Enron.

Among those convicted were former Enron chief executive officer Jeffrey Skilling and Enron founder Kenneth Lay, who died July 5 from heart disease.

Lou Chibbaro Jr. can be reached at lchibbaro@washblade.com.