Defense Lawyers Decry Charges in Enron Trial

Opening statements were given Tuesday in the trial of former Enron executives Ken Lay and Jeffrey Skilling. Skilling's lawyer, Daniel Petrocelli, accused the government of coercing the guilty pleas and said the defense would assert that no actual crimes were committed.

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Opening statements began yesterday in the trial of Enron's two former top executives. Prosecutors portrayed Ken Lay and Jeff Skilling as frauds who deceived investors while lining their own pockets. Defense lawyers countered that the government's indictments were manufactured for the court of public opinion, and would not stand up to the rigorous scrutiny of a federal court.

NPR's Wade Goodwin reports.

WADE GOODWIN reporting:

The government got its case off to a strong start by taking what promises to be an enormously complicated prosecution and turning it into a simple idea. This trial is not about off balance sheet partnerships, or the misuse of corporate reserve funds, or even the bilking of the State of California out of billions of dollars. It was about two executives banking hundreds of millions of dollars while lying to their employees, Wall Street, and the investing public, as their company headed toward extinction.

Prosecutor John Houston began his opening statement by playing audio and videotapes of former CEO Jeff Skilling briefing Enron executives about the dire condition of the company's broadband division. Skilling described an unbelievably bad revenue environment. He said the division's cost structure was out of control, and that employees were going to have to be transferred out to stop the bleeding. When the audio stopped, Houston turned to the jury and said, You just heard the facts, now listen to the fiction.

Then the court heard Skilling again, this time talking to investors and analysts, and the message was completely different. Skilling said Enron's broadband services division was doing just fine and that he was feeling very good about it.

Next, Houston turned his attention to former Enron Chairman, Ken Lay. Again, the theme was that Lay misrepresented the condition of his company in the fall of 2001. Prosecutors focused on Enron whistleblower Sherron Watkins and her meeting with Lay to warn him that unless Lay took immediate action, the company would implode in a wave of accounting scandals.

In the weeks that followed, Enron's financial position grew ever more precarious. But in an online chat with company employees, Lay took pains to reassure his anxious workers that the company's cash reserves were more than adequate and that the accounting was solid.

In his opening statement, Skilling's lawyer Daniel Petrocelli countered that his client had built Enron into the powerhouse that it had become through his genius and hard work. And Petrocelli attacked the government's indictment and conviction of many of the 16 Enron executives who've already pleaded guilty. He accused the government of coercing the guilty pleas, and promised the defense would prove there were actually no crimes committed. Outside the courtroom, Petrocelli continued that line of argument.

Mr. DANIEL PETROCELLI (Attorney for Jeff Skilling): I think you've heard our message. We just want the jurors to understand what the facts are. It's all about the facts. We're not in a court of public opinion anymore; we're just going to look at evidence, witnesses, documents, facts. That was the basic message.

GOODWIN: Mike Ramsey, Ken Lay's lawyer, savaged the government's case against his client. He described the writing contained in the indictment as nearly incoherent, created by somebody with a nervous disorder. He drove home the point that failure in business is not a crime. Ramsey said that if the government tried to jail every executive whose country went bankrupt, they'd have to turn Oklahoma into a penile colony in order to hold all the convicted CEO's.

Wade Goodwin, NPR News, Houston.

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