Skilling’s Lawyer Girds for an Appeal
Daniel M. Petrocelli tried unsuccessfully to secure an acquittal for Enron Corp. Chief Executive Jeffrey K. Skilling.
Now, he plans to focus on preventing the government from seizing Skilling’s $55-million fortune through forfeiture proceedings.
Skilling has blown through $23 million he’d set aside for his legal defense before the government froze about $55 million of his assets. Much of that went to his legal team, headed by Petrocelli, who has been living in Houston since December to prepare for the grueling trial.
Petrocelli was assisted by 13 other lawyers and six aides from his Los Angeles law firm, O’Melveny & Myers.
As the day wound down after the guilty verdicts, the defense lawyer plotted his next move.
“Words cannot describe how disappointed I am with today’s verdict,” Petrocelli said with a weary voice. “I can’t even begin to think about what else I’m going to do except continuing to fight for Jeff Skilling.”
Petrocelli figured he had a winning case at trial. But Skilling was convicted Thursday on 19 of 28 counts.
“It’s no time for me to rest now,” Petrocelli said. “We’ve got to take care of his [Skilling’s] interests first.”
Other trial lawyers understand his situation well. “He’s exhausted and spent, but he’s still got a client to think about; and he’s got to pick himself up and get back to work,” said Stephen A. Meister, a criminal defense lawyer.
By day’s end, Petrocelli was framing his case for a new trial and other arguments he plans to make to the trial judge before a June 6 deadline. And his team will be poring over the court rulings that went against Petrocelli and the evidence at trial for the arguments he’ll raise on appeal.
“Virtually every [ruling] went against us, from the beginning to the end,” Petrocelli said. “My own view is that the verdict is not supported by the evidence.”
Petrocelli, 52, gained his trial experience in large, complex civil cases for clients including Unocal Corp. and Walt Disney Co.
His celebrity dates back to his work in a Santa Monica courtroom when he won a $33.5-million verdict for the family of murder victim Ron Goldman in a 1997 wrongful-death case against O.J. Simpson. The former professional football star had been acquitted in the deaths of Goldman and Simpson’s ex-wife Nicole Brown Simpson.
In the Enron trial, Petrocelli was undaunted about defending Skilling on criminal charges, saying it was more like a complex business trial.
In a similar vein 15 years ago, well-regarded civil trial lawyer Stephen C. Neal defended banking executive Charles H. Keating Jr. on criminal charges stemming from the high-profile collapse of Lincoln Savings & Loan Assn. Neal lost his first criminal case at trial but won on appeal.
Petrocelli has the “right combination of personality and affability and toughness and intelligence that make him a strong courtroom presence, and effective with juries,” Meister said.
In Petrocelli’s closing arguments, he told the jury that the government had built its case mainly by pressuring Enron subordinates with the threat of long prison terms and financial ruin if they refused to cooperate.
During the trial, Skilling testified in his own defense, and jurors said after the verdict that he was adept at explaining complicated financial issues at Enron. But forewoman Deborah Smith said she couldn’t reconcile Skilling’s testimony with his reputation as an involved manager.
Nonetheless, jurors said they were impressed with Petrocelli.
Juror Freddy Delgado, an elementary school principal, said: “If I ever had to be a defendant, I would go with Mr. Petrocelli.” To which juror Nancy Thomas quipped: “If you had the money.”
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Chronology of a fallen energy giant
1985: Houston Natural Gas merges with InterNorth to form what will become Enron Corp.
1989: Enron begins trading natural gas commodities.
December 2000: Enron announces that President and Chief Operating Officer Jeffrey K. Skilling will take over as chief executive from Kenneth L. Lay in February, with Lay remaining chairman. The company’s stock hits a 52-week high of $84.87.
2001
Aug. 14: Skilling resigns as CEO; Lay is named CEO again.
Oct. 16: Enron reports a $638-million third-quarter loss and discloses a $1.2-billion reduction in the value of shareholders’ stake in the company. The move is partly related to a web of partnerships run by Chief Financial Officer Andrew S. Fastow that had helped Enron inflate profit and hide debt.
Oct. 22: Enron acknowledges a Securities and Exchange Commission inquiry.
Oct. 24: Enron ousts Fastow.
Oct. 31: Enron announces that an SEC inquiry has been upgraded to a formal investigation.
Nov. 8: Enron revises financial statements for the previous five years to account for $586 million in losses.
Nov. 28: Enron stock plunges below $1 as questions about its finances mount.
Dec. 2: Enron files for Chapter 11 bankruptcy protection.
2002
Jan. 9: Justice Department confirms that it has begun a criminal investigation.
Jan. 23: Lay resigns as chairman and CEO.
Feb. 7: Fastow invokes the 5th Amendment before Congress; Skilling testifies, saying he knew of no problems at Enron when he resigned.
March 14: Former Enron auditing firm Arthur Andersen is charged with destroying Enron-related documents.
June 15: Andersen is convicted of obstruction of justice.
Oct. 16: Andersen is sentenced to probation and fined $500,000; the firm had already been banned from auditing public companies and had only a few hundred employees left after its conviction.
Oct. 17: Former top Enron trader Timothy N. Belden pleads guilty to wire fraud for helping to game the California electricity market during the 2000-01 energy crisis.
Oct. 31: Fastow is indicted on 78 counts, including conspiracy, fraud and money laundering.
2003
May 1: Fastow’s wife, Lea, and eight former Enron executives are charged. Lea W. Fastow is accused of participating in some of her husband’s deals and filing a false tax return.
July 11: Enron files a reorganization plan that says most creditors will get about one-fifth of the $67 billion they are owed.
Sept. 10: Former Enron Treasurer Ben F. Glisan Jr. pleads guilty to conspiracy and is sentenced to five years, becoming the first former Enron executive to be put behind bars.
2004
Jan. 14: Fastow pleads guilty to conspiracy in a deal that calls for a 10-year sentence and his help in the continuing investigation. Lea Fastow pleads guilty to filing false tax forms in a deal that calls for a five-month sentence and a year of supervised release.
Jan. 22: Former Enron chief accountant Richard A. Causey pleads not guilty in a six-count indictment that includes conspiracy and fraud charges.
Feb. 19: Skilling is indicted and pleads not guilty to 35 counts accusing him of widespread schemes to mislead government regulators and investors about the company’s earnings.
April 7: Lea Fastow withdraws a plea agreement after a federal judge balks at a sentencing deal that would have sent her to prison for five months and confined her at home for another five months.
May 6: Lea Fastow pleads guilty to a reduced charge of filing a false tax form, a misdemeanor, and is sentenced to one year in federal prison, the maximum sentence.
July 7: Lay is indicted. He pleads not guilty the next day to charges of manipulating Enron’s financial results and making misleading statements about the company’s health.
Nov. 3: Four former Merrill Lynch executives and a former Enron executive are convicted of fraud and conspiracy in a case involving Nigerian power barges.
2005
May 31: U.S. Supreme Court overturns the Andersen conviction. The government later says it will not retry the firm, which is virtually defunct.
Dec. 28: Causey pleads guilty to securities fraud and is sentenced to seven years in prison.
2006
Jan. 30: Trial of Lay and Skilling begins.
May 17: Jury begins deliberations.
May 25: Jury convicts Lay on six counts of conspiracy and fraud and Skilling on 19 counts including conspiracy, fraud and insider trading. In a separate case, a judge convicts Lay of four counts of bank fraud and false statements.
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Sources: Associated Press, Times research
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Times staff writer Thomas S. Mulligan in Houston contributed to this report.
