Advertisement
YOU ARE HERE: LAT HomeCollections

Ex-Exec at Enron Amassed Wealth in Virtual Obscurity

September 02, 2002|MEGAN K. STACK and NANCY RIVERA BROOKS | TIMES STAFF WRITERS

HOUSTON — He stays inside these days, deep within the great postmodern box of a mansion he built when the millions were still rolling in. Those days are over--now a uniformed guard paces the smooth driveway and photographers gawk from the sidewalk, eager for a glimpse of his thin frame.

Michael J. Kopper has reinvented himself more than once. College classmates remember him as a middle-class kid from New York's Long Island with a Gatsby-esque hunger for opulence. He studied and eventually became an ambitious banker. He came to Houston seeking the fast riches promised by Texas lore and got what he was after in the elite ranks of Enron Corp.

As an executive at the energy giant, Kopper staked out a profitable piece of middle ground: He was important enough to get in on the deals and low-profile enough to slip unnoticed through the labyrinthine passages of complicated financial manipulations. He was loyal, he kept his mouth shut, and he made a fortune.

Kopper's most recent metamorphosis came this month, when he strolled into a federal courtroom and pleaded guilty to money laundering and conspiracy to commit wire fraud. In a bid for a lighter sentence, Kopper agreed to turn over $12 million in ill-gotten riches and give federal prosecutors the information they need to go after Enron's top executives.

The plea bargain casts a formerly anonymous executive as one of the most crucial figures in Enron's spectacular swan dive, one who is expected to play a major role as the investigation moves forward and in any eventual trials.

The morning he entered his plea, a somber Kopper told the judge he has sought treatment for stress and anxiety. Around here, he's unlikely to garner much sympathy. Kopper has pointed fingers at his friends, his co-workers and Andrew S. Fastow, the boss who made him rich. Moreover, he has confessed to helping himself to millions of dollars he didn't earn.

"If I saw him outside the house," huffed a neighbor who asked not to be identified, "I'd roll down my window and say, 'Hey, some of us work for a living.' "

Kopper grew up in Woodmere, N.Y., and studied economics at Muhlenberg College in Allentown, Pa., before transferring to Duke University. The young Kopper was embarrassed by his middle-class roots, said Susan Hoke, a classmate from Muhlenberg. When she visited his family's Long Island home, he took her on a sightseeing tour of wealthier parts of town.

"He would say, 'This is where I want to live someday.' He thought he was poor," Hoke told the Morning Call in Allentown. "He was always very motivated by money, always kind of knew how to get ahead without doing a lot of work."

After Duke, Kopper crossed the Atlantic to earn a graduate degree from the London School of Economics. He came home to New York and started his career working for a Canadian-based bank. In 1994, he moved to Houston to work for Enron's finance division.

At Enron, Kopper appears to have been neither well known nor well liked. A few former co-workers said he was brilliant, articulate and arrogant, but most never heard of him until the troubles began.

A lawyer for Kenneth L. Lay, who as chairman and chief executive was the company's guiding spirit, says Lay never clapped eyes on Kopper until the pair appeared before Congress in February.

"He wasn't one of these people that everybody in the building knew," a former Enron employee said. "I don't even remember seeing him in the elevator. The people making deals were off on their own."

It was the complex financial webs he spun with Fastow, Enron's chief financial officer, that fueled Kopper's exuberant rise to riches--and that could still land him in prison when he is sentenced in April.

At first blush, Kopper and Fastow have little in common. But to hear Kopper tell it, they were bound by a sacred mutual interest: money.

Federal investigators allege that Fastow masterminded a series of schemes to make fortunes from Enron's outside partnerships.

Enron used the partnerships to keep debt off its books. Companies do not have to report a partnership's assets or debts on their balance sheets as long as at least 3% of each partnership is owned by outside investors.

In 1997, authorities allege, Fastow began taking the equity share reserved for outside investors for himself--loaning money to Kopper and other friends, who invested in the partnerships and paid kickbacks to Fastow.

Fastow has denied wrongdoing through his attorney, but Kopper admitted in his plea agreement that he reaped millions in investment gains and management fees while hiding Fastow's conflicting roles. Kopper admitted scouting investors for his boss and ferrying money between Fastow and would-be investors.

The partnerships made Kopper and Fastow rich, and they took their families, friends and colleagues along for the ride, according to documents filed with Kopper's plea deal.

Advertisement
Los Angeles Times Articles
|
|
|