The "Global Galactic" Document: The Closest Thing to "a Smoking Gun"

  The Global Galactic Agreement ("Additional Agreements Between Enron and LJM/AF")(Document prepared by Andy Fastow in September 2000)(pdf)

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CFO Andy Fastow

CAO Richard Causey
Prosecutors called it "their most incriminating document."  The "Global Galactic" document was a three-page handwritten tally sheet of existing agreements between Enron and LJM (a partnership set up by CFO Andy Fastow).  The popular name for the document derives from the entry "Global Galactic deal" on the calendar of Enron 's Chief Accounting Officer, Richard Causey, for a half-hour meeting at 9 A.M. on September 6, 2000 with Fastow. The agreement outlined a series of side deals that had transferred assets from Enron to Fastow's LJM.  The transfers violated accounting rules, but allowed Enron to report the company's desired end-of the quarter results.  The document, drafted by Fastow, and bearing the initials of Fastow and Causey (although Causey, before he plead guilty to one count of security fraud, planned to deny ever reviewing or initialing the document), outlined a plan for the repurchase of the assets in such a way as to guarantee that Fastow would not incur any losses.  The document, in short, made clear that Enron's "sales" to LJM were nothing but a sham. 

Jeffrey Skilling claimed never to have heard about either the document or the side deals described in the document. Fastow, however, having plead guilty and been called as the star prosecution witness, testified that Skilling orally acknowledged the Global Galactic agreement that revealed how Enron removed risks (one prosecution witness used the term "nuclear waste" to describe the toxic nature of the transferred assets) from its balance sheets.  If Skilling was indeed aware of the agreements reported in the memo, that would be compelling evidence of security fraud.  In the prosecution's view, the Global Galactic document put LJM (and Fastow, Causey, and Skilling) at the center of the web of Enron's criminal schemes.

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