Jurors Begin Deliberating Enron Case
After a four-year federal investigation and a 3 1/2 -month trial, the landmark fraud and conspiracy case against former Enron Corp. leaders Kenneth L. Lay and Jeffrey K. Skilling is in the hands of a South Texas jury.
The panel of eight women and four men, whose occupations include dairy farmer, dental hygienist, teacher and court clerk, began deliberations Wednesday afternoon after a final appeal from prosecutor Sean M. Berkowitz, head of the Justice Department’s Enron Task Force.
At the end of a trial that featured thousands of documents and more than 50 witnesses, Berkowitz sought to convince the jury that the government’s case was at heart a simple one. He dramatized the point by presenting the prosecution’s final chart: a large poster with the words “Truth” and “Lies” rendered in vivid black and white.
“We have presented overwhelming evidence of a conspiracy at Enron to cook the books and present the company as something it wasn’t,” Berkowitz said. Referring to Lay and Skilling, he said, “I’m asking you to send them a message that it’s not all right. You can’t buy justice; you have to earn it.”
The jury spent the afternoon behind closed doors before leaving the courthouse for the day without reaching a verdict. They are scheduled to resume deliberations today.
The collapse of Enron in late 2001 was the most prominent of a series of corporate scandals involving names such as WorldCom Inc., Tyco International Ltd., Adelphia Communications Corp. and Global Crossing Ltd.
Lay, 64, and Skilling, 52, top the list of U.S. executives who were criminally charged in the slew of investigations that followed. They face decades in prison if convicted on all charges -- six counts of conspiracy and fraud against Lay and 28 counts of conspiracy, fraud and insider trading against Skilling.
Over 2 1/2 days of final arguments this week, the defense and the government presented radically different interpretations of the Enron debacle.
Lawyers for Skilling and Lay argued Tuesday that beyond the secret and relatively small-scale thievery of former Chief Financial Officer Andrew S. Fastow and several of his lieutenants, there was no crime at Enron. Moreover, they said, the company was healthy within weeks of its demise. It crumbled only because of a “crisis of confidence” brought on by negative news stories and the machinations of short sellers trying to profit from a plunge in Enron stock, they said.
Fastow aside, the defense argued, most of the government’s witnesses were innocent people who, in the words of Skilling’s lead lawyer, Daniel M. Petrocelli, were “robbed of their will” by coercive prosecutors who were determined to bag trophy convictions of Enron’s former chairman and chief executive.
Defense lawyers said the prosecution’s case was so wobbly -- especially on the key conspiracy charge -- that the government resorted to cheap shots such as blindsiding Skilling with questions about his investments in a former girlfriend’s company and grilling Lay about his personal sales of Enron stock. Lay, lawyers reminded the jury, was never charged with insider trading, nor did any charges grow out of Skilling’s side investment.
The defense’s broadest philosophical point was that the Enron prosecution spelled trouble for American capitalism because it amounted to criminalizing legitimate business behavior.
Those were the main assertions that Berkowitz tried to rebut Wednesday as he concluded the government’s final argument, which began Monday with a four-hour presentation by co-prosecutor Kathryn H. Ruemmler.
Virtually sprinting through his points, as charts and documents flashed up on the big courtroom screen, Berkowitz said it was not a sudden crisis of confidence that toppled Enron.
“Senior management had been lying to the public for years,” he said, and by the late summer and fall of 2001, the truth was starting to come out.
“Enron,” Berkowitz said, “could not handle the truth.”
He ridiculed what he called “the cornerstone” of the defense: that nine former Enron executives who had pleaded guilty and signed cooperation agreements with the government all lied when they told similar stories of, for example, last-minute changes to Enron earnings reports so that profit would meet Wall Street forecasts.
“This isn’t Hollywood, ladies and gentlemen,” the prosecutor said. “We didn’t make this up.”
As to Lay’s stock sales and Skilling’s investment in his girlfriend’s company, Berkowitz said that, whether spelled out in the indictment or not, they provided crucial evidence of one of the most important factors in the case: the defendants’ credibility.
When Berkowitz cross-examined Skilling about the side investment, asking questions that he said Skilling was unprepared for, “you saw him panic and you saw him lie, ladies and gentlemen.”
During the trial, the jurors were attentive and extraordinarily punctual. Over 14 weeks, none of the 12 jurors or four alternates was absent or even late for a session. The only absence came last week when one of the alternates called in sick on the final day of testimony. U.S. District Judge Sim Lake excused her from the rest of the trial, saying that the attendance record had been so spotless that there was little risk that the case would not be completed without her.
In a sign of how involved the jurors had become, the excused alternate showed up this week for a session of closing arguments, sitting in one of the spectator benches.
Lake, acknowledging the commitment shown by the alternates, said he would have a bailiff contact them when a verdict is reached and allow them time to come to the courthouse and hear the verdict read.