Enron noose tightens as aide sets deal

The snare around former Enron chief financial officer Andrew Fastow tightened today after one of his ex-lieutenants pleaded guilty and agreed to co-operate with a criminal probe into the energy giant's dramatic collapse.

Michael Kopper, a former managing director of Enron Global Finance and Fastow's right-hand man, last night pleaded guilty to money laundering and fraud charges at a court hearing in Houston, Texas.

He admitted helping his boss run shadowy Enronrelated partnerships that hid billions in debt, inflated profits and sparked Enron's fall into bankruptcy last December.

The guilty pleas are the first criminal charges brought against a former Enron employee and represent significant progress in the US government investigation into the scandal. As part of the deal, Kopper will co-operate with prosecutors and pay back $12 million of assets, but he could still face a jail term of up to 15 years.

The US Justice Department has asked a federal judge to seize $23 million of funds earned by Fastow and other company executives from the partnerships, describing the money as "tainted".

Prosecutors said they would go after a $3 million house Fastow is building in Houston's most expensive neighbourhood, which has become for many a symbol of the entire Enron debacle.

Government investigators are also looking into how much other Enron managers, including former chairman Kenneth Lay, knew about the partnerships. Lay's lawyer said last night his client presided over such a sprawling company that he knew nothing about the illegal side-deals. "When people steal, they keep it secret," he said.

Kopper helped to run Chewco, one of the notorious secret partnerships set up by Enron in 1997. Chewco, along with Jedi, enabled Enron to keep about $700 million of debt off its books.