Fire at Former House of Fastow

Arson suspected; indicted former Enron CFO used house as collateral for bail bond. Plus: Two recent CFO polls offer two views of the economy. Can both be right? And: NUI, First Investors to restate.

The Enron saga took a bizarre twist just a day short of the one-year anniversary of the energy company’s historic bankruptcy filing.

An unfinished home once owned by former Enron CFO Andrew Fastow was deliberately set on fire early Sunday morning. The home, located in a wealthy suburb of Houston, is valued at about $4 million. The fire reportedly caused damage to the front portion of the 11,493 square-foot house.

According to the Houston Chronicle, arson investigators say they have found no indication that the fire was set by someone connected to Fastow. “I wouldn’t say we have suspects yet, but we have leads,” Houston Fire Department Arson Bureau chief Roy Paul told the paper.

According to the Houston newspaper, there were witnesses to the arson. Apparently neighbors saw a white male fleeing in a black SUV. “That truck was recovered in an area parking lot later Sunday morning and is being processed for evidence, as are items found at the scene of the fire,” Paul told the Chronicle. The truck reportedly had been stolen from the parking lot of a nearby nightclub.

Paul told the Chronicle the fire was set by pouring flammable liquid on the front door of the house and lighting it.

“Right now, we have no idea why this fire was started,” Houston Fire Department spokesman Jay Evans told the Associated Press. “No suspect has been arrested and the case is under investigation.”

Fastow’s former home was reportedly sold in October to Thomas Hook, the chief financial officer of Hilcorp Energy. About $300,000 of work remained on the house when Hook purchased it. It was not immediately clear whether Hook and his wife had moved into the home yet.

The proceeds of the sale will be turned over to the U.S. Marshal’s Service until a judge rules on whether the house was stolen from Enron, which filed for bankruptcy in December amid fraud charges.

On October 31, a grand jury indicted Fastow on 78 counts of fraud, money laundering, and other felonies. The house is one of five properties the former Enron finance chief used as equity to help secure a bail bond after the indictment was handed out.

Prosecutors also froze $14 million in Fastow family bank accounts. Fastow has pleaded innocent to all charges.

Two Polls, Two Views

Is this the same group of CFOs?

Last week, reported on an American Express poll that showed that finance chiefs at middle-market companies are downright bearish about the economy. Indeed, according to the survey of 485 middle-market CFOs, more than two-thirds of the respondents said they believe that in 2003 the economy either will stay flat, act erratically, or decline further. The survey also indicated that finance chiefs at middle-market companies will focus on controlling indirect costs.


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