Prosecutors' plea-bargain with Lea Fastow, the wife of former Enron chief financial officer Andrew Fastow, fell through yesterday. When Judge David Hittner said he'd give her a longer sentence than the plea agreement proposed, Lea Fastow withdrew her guilty plea and decided to risk a trial on criminal tax charges. Her husband has already pleaded guilty to fraud charges and will serve 10 years in prison.

Lea Fastow's plea-bargain drama is a curious case study in what happens when a world where you can negotiate anything crashes into one where you can't.

The Fastows are a first-class example of the aggressive haggling culture that exists in the finance divisions of large corporations. People who rise to the posts of assistant treasurer and chief financial officer at a company like Enron, as Lea and Andrew Fastow did, respectively, know how to talk a few dollars out of the other guy's pocket. CFOs and assistant treasurers don't devise strategy, develop new products, or run operating units. Indeed, Andrew Fastow failed miserably when he was given an opportunity to run a business at Enron. Rather, these glorified accountants are tasked with squeezing everyone they encounter—making the most of the company's cash resources and wangling the best deals from banks. They troll databases looking for places where the company can gain a basis point or two in additional interest or spend days sequestered in conference rooms brow-beating loan officers to lower their fees. For them, life is a constant series of negotiations, one in which minor adjustments can add up to big dollars.

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There is something vaguely un-American about all this bargaining. Transparency in pricing, after all, is one of the hallmarks of our economy. And nobody tries to haggle at a Wal-Mart checkout line. Still, in certain sectors of the 21^st-century marketplace, the values of the 19^th century endure.

Executives who work in sales or who deal with suppliers know they have to build relationships in which both parties can benefit. By contrast, financial types are taught by schooling and experience that negotiations are zero-sum. Every penny that goes to somebody else is one penny less for the corporation. Or in the Fastows' case, every penny for somebody else was one penny less for them.

Andy Fastow continually renegotiated his own pay deals with Enron. Wearing his CFO hat, Fastow spent his days haggling with or threatening investment banks to gain favorable financing terms for Enron. After he set up the so-called special purpose entities—which he controlled—Fastow spent his days negotiating against Enron to sweeten the deal for himself. Fastow prodded junior co-conspirators to kick back extra profits to him. (And they weren't nice round numbers, either. As Bethany MacLean and Peter Elkind write in The Smartest Guys in the Room, "[Enron colleague Michael] Kopper kicked $67,224 back to Fastow, his sons, and the Fastow Family Foundation.")

The executive haggler operates with the muscular principle that if you have power, you should relentlessly demand better terms. Finance types frequently apply these same practices to nonfinancial matters as well. Objectives like getting your kid into the right preschool, or extracting naming rights for a building, or hiring a nanny are seen as negotiations that can be resolved through the appropriate exchange of cash, with the emphasis always on gaining the best deal. You can always get what you want for less.

The Fastows seem to have taken the same you-can-negotiate-anything approach to their plea bargaining with the government. Since they were indicted—he in October 2002, she in May 2003—the couple has been negotiating intensely with prosecutors. Together, the couple agreed to forfeit control of assets worth more than $29 million. And they shrewdly worked the numbers on their prison terms to maintain continuity in child care while striking an advantageous deal. In the sort of tag-team parenting common to many families where both parents have serious obligations outside the house (although such obligations are rarely inside the Big House), Lea Fastow agreed to accept a five-month jail term and five months of home confinement. That would mean she would be out of jail before Andrew Fastow's 10-year term would begin. What's more, Lea's term would be shorter than the sentence called for by the guidelines. Talk about a deal!

The elegant solution didn't account for the fact that one actor in this drama doesn't have to negotiate: the judge. Refusing to accept the shorter prison term and unimpressed by the Fastows' business-school tactics, Judge Hittner said Lea Fastow would have to serve at least 10 months in jail. For the Fastows, that number was a deal-breaker.

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