One of the most sympathetic prosecution witnesses is Luitgard Fischer, a German citizen who was a finance director in EBS. John Kroger had his sites on her, but before he could make his move and indict, she got spooked with the threat of deportation and came forward. Kroger discusses this in his autobiography:
There is just so much evil packed into these paragraphs, it is difficult to believe that he had the audacity to publish it. I’m curious why the ETF was not interested in prosecuting low-level executives/employees. Surely if they were guilty, they should go to prison, right? But it isn’t true anyway. Look at Lea Fastow, William Fuhs, Chris Calger, Sheila Kahanek, and Michael Krautz. None of them were hugely powerful inside Enron (or Merrill Lynch, respectively.)
Furthermore, I find it amusing in an ironic way that Kroger would be shocked that people who might be under his microscope would do some research of their own. He calls it “creepy.” I wonder if he thought it was creepy when FBI agents took photographs of Joe Hirko’s house without a search warrant. Does he think it is creepy at all to publish a book in which he says he chose to come aboard the Enron Task Force because he was craving power after his girlfriend left him for another man. In fact, he even says that he was stalking her toward the end of their relationship; was that creepy at all? I think Luitgard’s googling of the “Professor” (hahahah) is completely and totally rational.
Luitgard Fischer testified that Project Braveheart – the project with Blockbuster – was fraudulent because Enron guaranteed a partner, nCube, a profit with no risk.Had such a promise been offered, it would have violated accounting rules (incidentally, it would have been a duplicate of the Nigerian Barge Deal – but with video on demand instead of electricity barges.)
“This transaction was based on accounting rules that I feel we violated,” said Fischer. She blamed Michael Krautz and her boss, Kevin Howard, for issuing promises to nCube. The jury disagreed; Michael Krautz was acquitted and Kevin Howard went to trial two times. Finally he accepted a plea deal to make it go away.
It was certainly not quite the slam dunk that Kroger had hoped.