Nov 03, 2006  |  By: LOU CHIBBARO J  | COMMENTS     

In August 2002, Michael Kopper, then 37, pleaded guilty to two counts of conspiracy after admitting that he and his domestic partner, William Dodson, stole about $16.5 million from Enron Corp. and its shareholders.

Kopper’s guilty plea took place at a federal courthouse in Houston one year after Enron, one of the nation’s largest energy companies, collapsed from a massive financial scandal that rocked Wall Street and triggered stronger rules to regulate corporations.

The openly gay Kopper had served as director of Enron’s global finance unit. Although he was not among the highest-level Enron executives embroiled in the scandal, he became the first one to publicly disclose how he and other Enron officials embarked on what authorities called a multimillion-dollar plundering scheme.

Now, as Kopper awaits his sentencing on Nov. 17 in Houston, Enron observers point to an ironic turn of events that has allowed Dodson to retain as much as $9 million from illegally obtained Enron proceeds that Kopper turned over to him.

While the government has forced spouses and family members of other Enron executives to forfeit millions of dollars obtained through illegal activities associated with the company, authorities have yet to take steps to reclaim Dodson’s Enron-related proceeds.

Kopper disclosed details of how he and Dodson joined other Enron officials in bilking millions of dollars from the Houston-based company in testimony as a government witness in a September 2004 trial of six former Enron and Merrill Lynch executives. Authorities charged the executives with conspiracy and fraud in an alleged sham sale of electric-generating barges located off the coast of Nigeria.

Among the information emerging from this and subsequent trials of Enron figures was that Kopper enlisted Dodson to serve as a joint owner in one or more sham companies that operated in partnership with Enron, The Houston Chronicle reported. In one such company, called Chewco Investments, Kopper and Dodson netted more than $7 million after the company was sold back to Enron, Kopper testified.

A plea bargain agreement with Kopper required him to return about $12 million of his own assets obtained from Enron schemes to a fund set up to reimburse stockholders and employees for their losses.

But prosecutors so far have chosen not to seek forfeiture of at least $9 million in Enron-related funds that went to Dodson, the Chronicle reported.

According to the 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.

“This highlights the point that people don’t always think about the obligations as well as the rights that go with marriage,” said Alphonso David, a staff attorney with the gay litigation group Lambda Legal Defense & Education Fund.

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.

“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.

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 later this month comes after he has 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.

Kopper faces a maximum sentence of 15 years in prison. Legal observers predict he will receive a more lenient sentence from U.S. District Court Judge Ewing Werlein Jr. because of his cooperation with prosecutors.

Kopper’s friends and family members told The New York Times they are hopeful that Werlein would sentence him only to a fine and probation, but other legal observers expect Kopper to receive some jail time, possibly between two and three years.

Since his guilty plea, Kopper has ...