Enron’s Ex-Internet Chief Pleads Guilty

The former head of Enron Corp.’s high-speed Internet unit pleaded guilty Friday to securities fraud and agreed to help federal prosecutors on other cases related to the energy giant’s collapse.

Kenneth Rice, 45, faces up to 10 years in prison and a fine of up to $1 million. Sentencing was set for Jan. 31. The plea agreement with prosecutors also requires him to forfeit $13.7 million in cash and property that includes jewelry and exotic sports cars.

Rice was charged in 2003 with selling 1.2 million shares of Enron stock for more than $76 million while he knew Enron Broadband Services was failing. The more than 40 counts against him included fraud, conspiracy and other charges for participating in a scheme to tout Enron’s broadband network as having capabilities it didn’t have to impress analysts and inflate the company’s stock.

According to the Justice Department, the unit never made a dime and was abandoned shortly after Enron’s bankruptcy filing in December 2001.

The promotion of the broadband unit is also cited in the indictment of former Enron Chief Executive Jeffrey K. Skilling, a major broadband cheerleader during Enron’s halcyon days. As chief operating officer, Skilling praised the unit and its capabilities at analyst meetings in January 2000 and January 2001.

Ron Woods, one of Skilling’s attorneys who attended Rice’s plea hearing Friday, declined to comment, as did Rice’s lawyers, Dan Cogdell and Bill Dolan.

U.S. District Judge Vanessa Gilmore allowed Rice to remain free on a $3-million bond pending sentencing. Like 10 others who have pleaded guilty to various charges stemming from Enron’s failure -- including former finance chief Andrew S. Fastow -- Rice’s sentencing probably will be postponed repeatedly as he continues to cooperate in prosecutors’ now 2 1/2 -year investigation of Enron’s collapse.