Former Enron Corp. Chairman Kenneth Lay on Friday agreed to hand over, within three days, more than 870 pages of what he terms “personal” correspondence to the Securities and Exchange Commission (SEC), just moments before the commission was set to argue the case in a Washington, DC federal courtroom.

The SEC had requested the additional papers under a subpoena, but Lay and his attorneys had stonewalled the commission for more than a year on the basis of Lay’s constitutional Fifth Amendment rights. Just minutes before the hearing was to begin on Friday morning, an order was issued by U.S. District Court Judge Royce Lamberth that formalized an agreement between the SEC and Lay’s lawyers.

According to the order, the SEC may use any leads derived from the documents for any law-enforcement purpose, including any future criminal or civil action it may bring against Lay. The commission had argued that there was no constitutional protection for the corporate records and said they must be turned over even if they might incriminate Lay personally. The SEC does not plan to make any of the records available to the public because they are part of a continuing investigation, SEC attorney Luis Mejia said Friday.

The papers include copies of Enron memoranda and other documents that included Lay’s handwriting and copies of letters, position papers and drafts of speeches, according to the SEC.

“The SEC got everything it wanted,” said Mejia. “We’re very pleased with the results.”

Lay and his legal team already had given the SEC more than 23,000 pages of documents. He had argued that the additional documents should be withheld because they were personal rather than corporate in nature. Lay said he wanted to invoke his constitutional Fifth Amendment right against self-incrimination because the SEC would not guarantee the information would not be later used against him.

In related Enron news, Lea Fastow, the wife of ex-Enron Chief Financial Officer Andrew Fastow, apparently is negotiating with prosecutors for a plea bargain that could send her to federal prison for five months or more. Sources told the Houston Chronicle on Friday that she may appear in court by mid-week to agree to, or possibly begin, a prison term.

However, the Chronicle noted that the negotiations may not prove successful because Enron Task Force prosecutors, Lea Fastow and U.S. District Judge David Hittner all have to agree to be bargain for it to be consummated.

Lea Fastow, who worked at Enron between 1990 and 1997, was an assistant treasurer when she left. She was charged in May with six criminal counts, including conspiracy to commit wire fraud, money laundering and four counts of making false tax returns. She had pleaded not guilty to all counts (see Daily GPI, June 26). A trial is tentatively set for February in Hittner’s court.

If Lea Fastow accepts a plea bargain and is sent to prison, sources contend she then could be home in time to care for her and Andrew Fastow’s two children. Andrew Fastow’s trial is scheduled to begin April 20, 2004, however, he is attempting to have the trial moved out of Houston. He has pleaded not guilty to 109 criminal charges, and his lawyers want the trial moved out of the state because of the prejudice of a jury pool in Texas, and especially in Houston.

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