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The Honolulu Advertiser
Posted on: Friday, May 26, 2006

Appeal's prospects 'extremely dim'

 •  Evidence against Skilling, Lay irrefutable, jurors say

By Molly Selvin
Los Angeles Times

Kenneth Lay leaves the courthouse with his wife, Linda, following his conviction in Houston. Former Enron executives Lay and Jeffrey Skilling were convicted yesterday of conspiracy and securities and wire fraud in one of the biggest business scandals in U.S. history.

STEVE UECKERT | Houston Chronicle via AP

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Although lawyers for convicted Enron Corp. executives Jeffrey K. Skilling and Kenneth L. Lay have announced they will appeal yesterday's verdicts, their chances for success are very small, legal experts said.

Appellate judges are generally reluctant to order reruns of trials as long and expensive as this one, the experts said. Moreover, the prospects that either of the two men would prevail on specific issues they plan to raise are "extremely dim," said Samuel W. Buell, a University of Texas law professor and former member of the federal Enron Task Force, which investigated and prosecuted the case.

Skilling's lawyer, Daniel M. Petrocelli, said he intends to file a series of motions, including one for a new trial, by a June 6 deadline. He and his team of 14 lawyers and six paralegals and aides will work throughout the summer on an appeal.

In announcing his appeal plans, Petrocelli cited a long string of court rulings adverse to the defense, and said a key issue will be the judge's refusal to move the trial out of Houston.

"There are psychological and personal losses suffered here that simply don't exist elsewhere," Petrocelli said. "We pointed this out to the judge at the start when we sought a change in venue."

University of California, Berkeley law professor Franklin Zimring agreed that "everyone in Houston knows someone without a pension" or a job because of Enron's collapse.

"If anybody has grounds to appeal on venue grounds," he said, "Skilling and Lay might."

But "what part of Antarctica should the trial have been held on?" he asked. "Who hasn't heard of this?"

Zimring and other experts noted that U.S. District Judge Sim Lake was careful to exclude from the jury anyone personally affected by Enron's demise.

He also said appellate courts often give trial judges wide discretion on venue decisions, especially when jurors said, as they did in this trial, that they could be fair.

Moreover, moving the trial out of Houston, where Enron was headquartered, would not have guaranteed an acquittal.

Former WorldCom Inc. chief Bernard J. Ebbers was convicted on accounting fraud charges even though his trial was moved to New York from Mississippi, where WorldCom began as a small phone company.

As a general matter, several legal experts said, appeal is always an unlikely proposition for the appellant, even more so after this high-profile contest.

"This was an incredibly expensive trial involving hundreds of thousands of man hours and millions of dollars," said Scott Meyers, a Chicago securities lawyer.

"These types of cases are incredibly disruptive for judges," he said. As a result, "the tendency is for courts to try and find a way to sustain the verdict."

Moreover, "the trial was conducted very carefully by everybody involved," Buell said. "There are no glaring mistakes that you can point to," he said, citing Lake as "meticulous" in his conduct of the proceedings.

As a result, Buell added, lawyers are left with few specific grounds on which to argue on appeal.

Lake's instructions allowing jurors to consider whether Skilling and Lay deliberately turned a blind eye to wrongdoing by Enron subordinates may be one basis for a new trial.

Petrocelli argued that the standard should have been whether fraud was committed and whether Skilling intended to defraud.

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