Enron Defense Takes Aim at Witnesses
Defense lawyers in the Enron Corp. fraud trial wasted no time Monday trying to establish a key point in their case -- that many of the government’s witnesses were coerced into testifying by aggressive prosecutors.
Former Enron employee Joannie Williamson, the first witness called by lawyers for Kenneth L. Lay and Jeffrey K. Skilling, testified that her boss at the energy giant confided to her in August 2004 that he was pleading guilty to a crime despite his belief that he was innocent.
Her former boss, then-Enron investor relations head Mark E. Koenig, was the government’s leadoff witness. Williamson’s testimony supported the defense’s contention that the government pressured many of its witnesses into signing cooperation agreements and admitting to crimes they didn’t commit.
As the trial entered its 10th week, defense lawyers said the anticipated dramatic high point of the case -- testimony by former Chief Executive Skilling and Enron founder Lay -- may come sooner than expected. Daniel M. Petrocelli, Skilling’s lead lawyer, said the defense had juggled its witness lineup and now expected to put Skilling on the stand this week, perhaps as early as Wednesday. Petrocelli earlier said he expected Skilling to appear at the end of next week.
Williamson testified that she worked for Koenig for nine years and became close friends with him and his wife. Under questioning by Chip B. Lewis, a lawyer for Lay, Williamson said she did not believe Koenig had done anything wrong and felt that he was honest.
Williamson said that when she heard a voicemail message from Koenig on the morning of Aug. 25, 2004, telling her that he intended to plead guilty that day and sign a cooperation agreement with the government, “I was shocked. I was stunned. I was hurt.”
When Koenig called her later in the day, she asked him: “Why did you plead guilty? You’re not guilty,” she testified.
Williamson said Koenig replied that he knew he was not guilty but that in order for his story to work, “everyone needs to feel that I am.”
On cross-examination by co-lead prosecutor Kathryn H. Ruemmler, Williamson said she understood Koenig to mean that he needed to convince the federal prosecutors that he believed he was guilty.
Ruemmler, noting Williamson’s view that Koenig was honest, asked whether she also believed that he had lied under oath when he testified earlier in the trial that he had committed the crime -- aiding and abetting securities fraud -- to which he had pleaded.
“Yes,” Williamson replied.
During two weeks on the stand in February, Koenig testified that Lay and Skilling were aware of efforts to manipulate Enron’s books so that the company’s reported profit would not fall short of the quarterly estimates by Wall Street analysts. Missing the Wall Street “number” by even a penny a share could result in a drop in Enron’s stock price, Koenig testified.
Koenig, under cross-examination by Lay’s chief lawyer, Michael W. Ramsey, denied having told Williamson that he was innocent. Ramsey had erroneously placed the date of the conversation in December 2005, but Lewis corrected that Monday, saying in an interview during a break in the trial that the conversation between Williamson and Koenig had been on the August 2004 date of Koenig’s guilty plea.
Ramsey was absent from the courtroom Monday and was scheduled to undergo coronary surgery today to address an apparent problem with a stent that was implanted about 10 days ago, Lay’s defense team said in a statement Monday. The stent was used to help correct a blockage in a coronary blood vessel.
Ramsey, 66, said in a telephone interview Thursday that he felt fine, but problems apparently developed over the weekend. He underwent some outpatient tests Monday that determined the need for the second surgery, according to the statement.
“We are optimistic that Mike will be back at trial soon,” the statement concluded.
Lay, 63, and Skilling, 52, face decades in prison if convicted of the multiple fraud and conspiracy counts facing them. The case sprang from a federal investigation launched after Enron imploded in late 2001, filing what was then the biggest bankruptcy in U.S. history.
