Closing arguments critical in Enron case
By Carrie Johnson
By Carrie Johnson
HOUSTON — Trying to sum up one of the era's most complicated business trials in six hours is a gargantuan task.
But that's exactly what prosecutors and defense lawyers will struggle to do as final arguments in the fraud trial of former Enron Corp. leaders Kenneth L. Lay and Jeffrey K. Skilling begin Monday.
Over 16 weeks, the jury heard competing descriptions of the misfortunes that befell the Houston energy-trading company — and the reasons for its ultimate downfall. Prosecutors say Lay and Skilling presided over widespread accounting fraud that cost investors and employees billions of dollars. The defense contends that market panic, not financial abuse, brought down an essentially healthy business.
The goal for lawyers on both sides is to highlight their best evidence to leave the strongest impression with jurors.
After U.S. District Judge Sim Lake reads lengthy technical instructions to the jury Monday morning, Washington-based prosecutor Kathryn Ruemmler will take about three hours to make the government's closing argument. A team of defense lawyers will argue all day Tuesday. Prosecutor Sean Berkowitz, director of the Enron task force, will get the final word and a chance to respond to defense arguments on Wednesday.
Then the fates of Lay, 64, and Skilling, 52, will rest with the jury.
The Enron prosecution is one of the most sophisticated white-collar investigations ever and the capstone in the Justice Department's effort to hold executives accountable for financial malfeasance. At the same time, Skilling and Lay, who earned a total of $370 million in the years before Enron's demise and whose pictures once were featured on the covers of business magazines, face the prospect of spending more than a decade in prison if they are convicted.
The defendants need to plant the seeds of doubt in the mind of only one of the eight women and four men on the jury to win a mistrial. Prosecutors need a unanimous verdict on at least one charge to convict.
Prosecutors must "take a very lengthy set of facts and boil it down," said Leon Rodriguez, a Washington defense lawyer not involved in the Enron case. "In a complex white-collar case, that's a really tough burden of proof, and it's been evidenced by acquittals and hung juries over the years."
Lawyers for Lay, who faces six fraud and false statements charges, and Skilling, who faces 28 criminal counts, have signaled that the government's heavy legal burden will be a key element of closing arguments.
"This is a case that is a very complex case, and it's got room in it for reasonable minds to disagree," Michael Ramsey, Lay's lead lawyer, said outside the courthouse this week in a preview of his closing argument.
But in a trial fraught with negative public perceptions, the defense grapples above all else with the lingering image of displaced workers sitting in front of a gleaming office tower, clutching boxes and belongings as they came to terms with the loss of their jobs and retirement savings when Enron filed for bankruptcy in December 2001.
"I've got to deal with five years of preconceived notions and whether any of that has changed," said Daniel Petrocelli, the lead lawyer for Skilling. "This is not about whether Jeff or Ken did a good job or a bad job. It's about whether they committed crimes."
For the most part, Lay and Skilling have presented a united front, despite temptation to point fingers at each other. Skilling led the company for years, until his August 2001 resignation for what he called personal reasons. Lay resumed control and stayed in charge through the bankruptcy filing.
At this stage, it would be difficult for either defendant to break the alliance without giving the government more ammunition in its rebuttal argument, legal experts said.
"It's possible, though I think it's very unlikely," said Houston defense lawyer Dan Cogdell, who represents former Enron broadband unit chief Kenneth D. Rice, who pleaded guilty and testified in the trial. "If one of them turned on each other, I think it would appear to be desperate at this point."
Petrocelli will argue for slightly more than three hours on Skilling's behalf, coordinating his presentation with Lay's team so the defense does not repeat itself in the precious six hours the judge allotted. In an unusual arrangement, because of Ramsey's absence for several weeks of the trial while he recovered from heart problems, a team of lawyers — including Ramsey, securities law expert Bruce Collins, appellate specialist George "Mac" Secrest, and former prosecutor Chip Lewis — will share about two hours and 40 minutes of argument for Lay.