Enron Trial Update: Video Memories

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The trial of former top Enron executives Jeffrey Skilling and Kenneth Lay continues in Houston. Madeleine Brand speaks with Wall Street Journal correspondent John Emshwiller about the latest from the complex legal proceedings, including viewing of Enron promotional videos featuring the two defendants.


Former Enron Executives Kenneth Lay and Jeffrey Skilling are walking down memory lane this week. They're watching excerpts from company videos made several years ago when they predicted that by now, Enron would be the world's leading company. Instead, the two men sit in a Houston courtroom accused of multiple counts of conspiracy and fraud.

I'm joined from Houston by John Emshwiller. He's been reporting on the Enron trial for the Wall Street Journal. And welcome to the program.

Mr. JOHN EMSHWILLER (Wall Street Journal Correspondent): Thank you for having me.

BRAND: Well tell us about these videos and why they were played in the courtroom?

Mr. EMSHWILLER: Well, the government took its first witness Mark Koenig, former head of investor relations, and took him through snippets of the videos where they said Mr. Lay and Mr. Skilling were involved in making misleading or false statements. The defense says well we want to watch the whole thing, each one of the videos because that'll give you a full or more complete picture of Enron. And they hope a more positive image of the two defendants.

BRAND: And these videos were what exactly? They were talks that Skilling and Lay gave to the company workers?

Mr. EMSHWILLER: A combination of videos and audio tapes to company workers and, in other instances, stock analysts and major investors each quarter that have a quarterly conference call about their results where they'd lay out how they did and how they thought they were going to be doing. And, of course, they were pretty uniformly positive. Jeff Skilling was very enthusiastic on these over Enron's operation and its future.

BRAND: And the prosecutors contend that he was lying to investors?

Mr. EMSHWILLER: And employees at key points on key matters. Mr. Skilling in one video was talking about how he viewed stock as being worth over $100 a share. Which of course it never got to. And by the time of bankruptcy it was under a dollar a share. So one danger for the defense in all this is that some his statements were so positive in this lengthy presentation, that you wonder what the jury's going to think, were these guys really hyping this company. Obviously that's not the impression the defense wants to give.

BRAND: And tell us about the government witness who so far has been the only witness in the trial and he's been on the stand for days now, Mark Koenig?

Mr. EMSHWILLER: Mark Koenig was the head of investor relations, which meant he was the guy who dealt mostly with Wall Street, but he was also sitting on most of these calls with Skilling or Lay because he was the guy who, you know, helped answer to the analysts. So he had a certain level of knowledge and contact. He wasn't a particularly close associate of either of the two men. But I think the government wanted somebody who could start out by giving sort of an overview of how dealing with the public works, because a lot of this case against these two men is that they misled the public and employees. So they wanted somebody who sort of tells them how the system worked as well as give them what they hoped is, you know, incriminating evidence against the two.

BRAND: Was his testimony undercut by defense attorneys?

Mr. EMSHWILLER: Dan Petrocelli, the attorney for Skilling has made some dents in some of Koenig's testimony. And then, you know, the government of course would come back with a redirect hoping to sort of shore up some places where they think the dents have been made. And then we move on to the next one. You know it's going to be like a four month or five month trial. So you always wonder will the jury even remember the first witness when they get to the deliberation stage. But I guess we'll find out.

BRAND: John Emshwiller is a reporter for the Wall Street Journal. He's in Houston where he's covering the trial of former Enron Executives Kenneth Lay and Jeffrey Skilling. Thank you John.

Mr. EMSHWILLER: Thank you.

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