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                       UNITED STATES DISTRICT COURT

                     SOUTHERN DISTRICT COURT OF TEXAS

                             HOUSTON DIVISION

                                         Case No. I{-03-CR-150

    DECLARATION OF ANI)REW S. FASTOW IN SUPPORT OF LEA FASTOW'S
    MOTION TO SCHEDULE TRIAL TO OBTAIN EXCULPATORY T)~STXONY
                       FILE)) EX PA~TE. UNDER SEAL

      I, A1~DREW S. FASTOW, declare under penalty of peijury, as follows:

      1.    I am making this declaration for the limited puxpose of and only in connection

with the particular proceeding of my wife's Motion to Schedule Trial to Obtain Exculpatozy

Testimony. I have been advised by my counsel that by making this declaration, I do not waive

any rights, including my Fifth Amendment rights and my attorney-client privilege, and I reserve

the right to assert those rights and any other rights at any other time as to the matters covered in

this declaration.

      2.    1 am the husband of Lea Fastow, the defendant in the above captioned matter. We

have been a couple for over 22 years, and I have been married to her for 18 years. We have two

children.

      3.    On October 31, 2002, the government obtained a 78-count indictment against me   ~   -

charging me in connection with various complex structured finance transactions at Enron Corp.

in 1997 - 2001. On April 30, 2003, the government flied a 109 count superceding indic1~ent

UNITED STATES OF AMERICA,

                 Plaintiff;

    V.

LEA W. FASTOW,

Defendant.

GOVERNMENT
 EXHIBIT
  7601
 CrimNo H-04-0025



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                                                              Lx Parte~ Under Seal

against tue concerning these same matters. Both indictments charge that I played a central role

in various allegedly Eraudulent transactions including RAflR and Chewoc.

       4.   I am preparing for ixiai. eased on advice of counsel and the Fifth Amendment, I

will decline to testify before my own trial. My case is set for a status conference before United

States District Judge Kenneth Hoyt on July 28, 2003.

       5.   If Lea Fastow's trial were held after the completion of my trial, I would not

invoke the Fifth Amendment, and I would testify at her trial, as set forth below.

       6.   I never, and to my knowledge and belief Michael iKopper never, agreed or

conspired with Lea Fastow to commit the crimes alleged in Counts 1 and 2 of Lea's indictment.

       7.   The indictment against Lea alleges in Paragraph 11 that payments totaling $67,

224 received by our family from Michael Kopper were a "kickback" from Chewco which should

have been reported on our tax returns. I would testify that Lea and I discussed our belief that

these payments were paid to us voluntarily and out of friendship, and therefore were not taxable

income.                                                                                          4

       8.   The indictment against Lea Fastow alleges in Paragraph 13 that money our family    ~.

received from Michael Kopper and Bill Dodson was in fact RADR income "disg~ised" as "either

interest from an unspecified loan to Kopper or gifts," and was paid to "foster the illusion" that

they were gifts which would not require reporting to the Internal Revenue Service. If called as a

witness, I would testily that:

            a.    Lea and I discussed the fact that $62,850 paid to us in August, 1997 was

       interest required to be paid to us under the tenus of a loan agreenent and as such was

       taxable income, and we therefore reported it on our tax returns;

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                                                          Ex Parte~ Under Seal

           1,.    Lea and I discussed the fact that other payments of money Lea and I and

     our sons Jeffrey and Matthew received from Michael Kopper and Bill Dodson were

     payments given to us voluntarily and out of friendship, and therefore were not tax~b1e

     income.

           c.     As a general matter, Lea and I frequently discussed and agreed on oux

     desire and duty to fully report all taxable income.

           d.     Based on my discussions with Lea, I am confident that she honestly

     believed that the payments we received from Kopper and Dodson were non-taxable, and

     that she therefore believed that our tax returns for 1997, 1998, 1999 and 2000 were in fact

     true and correct as to every material matter, contrary to the charges in Counts 3-6 of

     Lea's indictment.

     9.    I would also testify at Lea's trial that Michael Kopper told me that these various

payments were gifts to us, and I related Kopper's statements to Lea. Both Lea and I understood

that gifts were not taxable.

     DATE:         ~-' 03
                                                 FAS2~
                                       A~1JREW S.

           Si~ed and sworn before me on May ~,7oi# 2003.

                                       NiBtary Public in for the State of Texas

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