Colleague Could Counter Enron Prosecution Witness, Defense Says
The chief defense lawyer for former Enron Corp. Chairman Kenneth L. Lay signaled in court Thursday that he might call a witness who could contradict a key assertion by the government’s lead-off witness in the federal fraud and conspiracy trial.
Michael W. Ramsey opened his cross-examination of former Enron investor relations head Mark E. Koenig by asking whether Koenig had told a close friend and former co-worker just two months ago that he was innocent of the charges he had pleaded guilty to in August 2004.
Koenig, 50, immediately denied having said it.
Ramsey bored in, naming the woman and asking, “So if she says that, in this courtroom, she’ll be perjuring herself?”
“I believe that’s right,” Koenig replied.
The exchange was significant because one of the defense’s main points in the trial of Lay, 63, and former Enron Chief Executive Jeffrey K. Skilling, 52, is that many of the 16 people who already have pleaded guilty in connection with Enron’s collapse are actually innocent.
They were strong-armed by the government into cooperating with its investigation, the defense has argued, because they feared long prison terms and lacked the money to fight the charges. Evidence that Koenig’s plea was insincere could undermine the credibility of his testimony regarding Lay and Skilling’s alleged crimes.
Koenig, who completed his sixth day on the stand and his fourth day of intense cross-examination, has testified repeatedly that he pleaded guilty because he knew he had made false or misleading public statements about Enron’s financial health in the months leading up to the energy-trading company’s December 2001 bankruptcy filing.
The name of Koenig’s friend does not appear on the defense’s most recent witness list, but co-prosecutor Sean M. Berkowitz, head of the federal Enron Task Force, said during a break in the trial, “I’m sure she’ll be there” on the list soon.
Skilling’s lead defense lawyer, Daniel M. Petrocelli, said in a brief interview that he had not heard of the woman until Ramsey mentioned her.
Legal experts said Ramsey’s ploy raised strategic and possibly ethical issues.
“He’s put this witness in play; now, he has to call her,” said Robert R. Rigg, director of Drake University’s Criminal Defense Program. “If he doesn’t call her, the government can say at closing, ‘Where’s the witness they promised?’ ”
New York litigator Mark C. Zauderer said that according to legal ethics, “to ask a question like that requires a lawyer to have a good-faith reason for believing that the woman would testify that way, if called.”
Petrocelli closed his own cross-examination of Koenig just after the lunch break, sounding a theme that Ramsey would soon take up. Asking about an Enron internal reorganization that Koenig said had been undertaken to hide losses, Petrocelli got Koenig to concede that there also could have been legitimate business reasons for the action.
“Don’t you think this is pretty thin stuff?” Petrocelli asked.
Koenig replied that it was serious enough that he considered his part in the alleged coverup to be a criminal act.
Much of Thursday’s court session, like Wednesday’s, was taken up by the playing of audiotapes and videotapes of Enron conference calls and employee meetings during which Lay and Skilling made statements listed in their indictment as criminally misleading. The defense has insisted on playing the recordings in full because they contend that the government took the statements out of context.
During the morning session, U.S. District Judge Sim Lake called the lawyers to the bench for a private conference. The reason was that a juror had complained that she was being overwhelmed by Petrocelli’s cologne.
“I get a lot of compliments on that cologne,” Petrocelli said later of the fragrance, Chocolat. He made a quick trip to the men’s room to wash his face.
Lay and Skilling are charged with multiple counts of fraud and conspiracy and face decades in prison if convicted.
The trial will resume Monday.
