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Enron's Ken Lay and Jeff Skilling Finally Face a Jury

By Jeralyn, Section Crime in the News
Posted on Sun Jan 29, 2006 at 07:02:16 PM EST
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The fraud trial of Enron's Ken Lay and Jeff Skilling begins in Houston tomorrow. The Judge has said he expects jury selection to take one day.

The two are the biggest fish in a federal probe of the fallen Houston-based energy giant that has produced criminal charges against about 30 people. They were the only chief executives Enron ever had and were chief architects of its storied rise during the 1990s.

The Government's side:

Prosecutors from the Justice Department's Enron Task Force are expected to argue that Messrs. Skilling and Lay headed a conspiracy that stretched over several years to hide serious financial and business problems at Enron by using accounting gimmickry and lying to the public. The government alleges that Mr. Skilling spearheaded this scheme, with Mr. Lay taking over when Mr. Skilling unexpectedly quit Enron in August 2001.

The defense:

The defense is expected to argue that despite all the negative clamor over Enron's financial and accounting practices, the company was fundamentally sound, well-run and not engaged in illegal activities. Defense attorneys contend that government officials, caught up in the public frenzy sparked by Enron's collapse, are trying to criminalize legitimate corporate practices. The defense has lined up a range of expert witnesses to buttress this position.

The star witness will be former Enron CFO Andrew Fastow, who got a ten year sentence for himself and a year sentence for his wife in exchange for cooperating with the prosecution. Ken Lay will portray him as the villain.

I don't know if Richard Causey, who pleaded guilty last month, will be a witness. Last week the Government dropped the four counts against Skilling that charged the two together committed fraud. Lay wasn't charged in those counts. Did they decide Causey's testimony wouldn't support the charges?

The remaining charges are these:

Skilling faces 31 charges of conspiracy, securities fraud, lying to auditors and insider trading.Lay faces seven charges of conspiracy, securities fraud and wire fraud. He also faces four separate personal banking charges that he will be tried on after the Enron case and before the judge only.

The pair have spent more than $38 million on their defense. Ken Lay has been vocal in recent months. Skilling has been quiet. Both have said they intend to testify. Lay will use the Bernie Ebbers defense that he didnt' know what was going on.

Mr Lay is either the architect of one of the most intricate and devastating fraud schemes in history or an unwitting and hapless entrepreneur who got in out of his depth while everyone around him was massaging the books.

If Bernie Ebbers was charged with, quite literally, fiddling while WorldCom burned, Ken Lay stands accused of conducting the entire orchestra as Enron was exploding around him.

The Houston Chronicle is featuring an Enron legal commentary blog written by local lawyers following the trial. Today they focus on whether Lay and Skilling can receive a fair trial in Houston.

More than 100 jurors will report for duty tomorrow morning.

[Graphic created exclusively for TalkLeft by CL.]

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    Enron's Ken Lay and Jeff Skilling Finally Face a Jury | 11 comments (11 topical)
    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#1)
    by ras on Sun Jan 29, 2006 at 03:52:37 PM EST
    Clinton pardons his old buddies when they commit a crime; Bush prosecutes his.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#2)
    by Edger on Sun Jan 29, 2006 at 03:57:46 PM EST
    Bush leads by example. His buddies all think it's ok to commit crimes. Then Bush turns on them and prosecutes.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#3)
    by Talkleft Visitor on Sun Jan 29, 2006 at 03:59:10 PM EST
    ras: Clinton pardons his old buddies when they commit a crime... the trial hasn't started, and you've already decided they're guilty?

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#4)
    by Dusty on Sun Jan 29, 2006 at 04:21:49 PM EST
    O please..All Presidents pardon..its a fact jack..You cant tell me that IF Scooter and whoever else gets nailed and gets jail time for Plamegate that the Shrub wont pardon them. Gee I didnt realize it was the Shrub personally prosecuting his "buddies"..I would bet he didn't have a hand in any part of it...hes been too busy trying to explain all the b.s.that has been coming out of DC and the WH in general...hes covering HIS ass and letting them fend for themselves.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#5)
    by jimakaPPJ on Sun Jan 29, 2006 at 04:43:06 PM EST
    dusty - No matter what else, the trial starts tomorrow. A little late for my taste, but I wager prison waits.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#6)
    by Dadler on Sun Jan 29, 2006 at 05:13:06 PM EST
    Bush has pardoned his share of sleazeballs. It's just not possible here. For a man who says he doesn't care about polls, he'd sure care about the one they took after he pardoned Lay.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#7)
    by Talkleft Visitor on Sun Jan 29, 2006 at 05:43:16 PM EST
    dadler: It's just not possible here. The first reason it's not possible here is that these guys have to be convicted before they can be pardoned. You're 100% right about W having no trouble pardon wealthy crook friends when it suits him. Remember this TL entry?:
    President Bush has granted a pardon to a Texan who pleaded guilty to fraud in one of the 1980's Savings and Loan scandals. He is David B. McCall, Jr., former lawyer and mayor of Plano, Texas.
    Assuming that Lay and Skilling are convicted, W might find it politically inexpedient to do much about it in the immediate term. But don't be too shocked if in January 2009, W is in the pardoning mood.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#8)
    by Darryl Pearce on Sun Jan 29, 2006 at 06:38:22 PM EST
    What could be the largest foreign investment in India was at risk. And Enron was the major player. ...I found it remarkable.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#9)
    by scarshapedstar on Sun Jan 29, 2006 at 10:00:09 PM EST
    Clinton pardons his old buddies when they commit a crime; Bush prosecutes his.
    Allow me to file these words in a time capsule and resurrect them at the end of Bush's term. I can't wait.

    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#10)
    by Talkleft Visitor on Mon Jan 30, 2006 at 05:40:32 AM EST
    The first reason it's not possible here is that these guys have to be convicted before they can be pardoned.
    This is incorrect. Click here for clarification. From the Website:
    Pardons can take place before or after a criminal proceeding. President Gerald Ford, for example, pardoned Richard Nixon before Nixon was ever charged with, let alone convicted, of any crime.
    Re: Enron's Ken Lay and Jeff Skilling Finally Face (none / 0) (#11)
    by kdog on Mon Jan 30, 2006 at 03:24:36 PM EST
    The pair have spent more than $38 million on their defense
    I thought the Lays were selling some of their many homes to make ends meat? Too bad Lay wasn't selling reefer instead of committing massive fraud, the state could have seized every penny the bastard has to where he'd need a public defender. His country club cronies would turn their back like he was Louis Winthorp.

    Enron's Ken Lay and Jeff Skilling Finally Face a Jury | 11 comments (11 topical)