On the Stand, Enron's Lay and Skilling Reverse Type

Enron founder Kenneth Lay and former CEO Jeffrey Skilling are closer to learning whether their futures lie in prison or liberty. Testimony ended early this week in Lay and Skilling's federal fraud and conspiracy trial, and the jury of eight women and four men return Monday to hear 12 hours of closing arguments.

The judge, prosecutors and lawyers for the defense all agree on one thing at this point: This jury is eager to begin deliberating. They've heard more than three months of evidence, and more importantly, they've now heard from the chairman and CEO.

The received wisdom among legal experts at the beginning of the Enron trial was that CEO Skilling might do himself serious damage on the stand, a consequence of his arrogance and his temper. Both were qualities for which he was famous at Enron. Chairman Lay on the other hand was perceived as an affable, glad-handing, grandfatherly type who just might save himself by winning over the jury.

Both men face the prospect of spending decades in prison if convicted of fraud and conspiracy.

But Skilling surprised the pundits by keeping his temper in check, allowing his attorney to guide him through his version of why Enron collapsed. The problem for Skilling wasn't his performance on cross-examination, either. It was what came before — the parade of his former colleagues, all top executives at Enron, who pointed their fingers at him while admitting their own guilt. His lawyer was forced to argue that these executives were actually innocent, every one of them, and that the Justice Department had managed to intimidate them into pleading guilty.

But Lay was supposed to have an easier time of it. The crimes he is alleged to have committed all occurred during the last four months of the company's existence. He was looking toward retirement as chairman of Enron when Skilling announced in August 2001 that he was walking away from the CEO job. Lay was compelled to step back in immediately. It was a fateful decision that ended up putting Lay in the courtroom, next to Skilling.

Lay is accused of lying to his employees, investors and analysts about the true financial condition of Enron. Lay's defense is that he believed everything he said, that Enron was a strong company with a bright future.

But Enron did not have a bright future; it spiraled down the drain. Lay repeatedly argued that the prosecution's second-guessing of many of the decisions and statements he made during those last four months was a waste of time. Yes, everyone makes mistakes, Lay explained. But unlike prosecutors, he was making decisions in real time. And Lay made it clear that about the only thing he would have changed if he could do it over again was the hiring of Andy Fastow, Enron's crooked chief financial officer.

And therein may lie what now appears to be Lay's biggest problem. With every minute on the stand, Lay's sense of being wrongly accused grew. Unlike Skilling, Lay wore his status as defendant as a badge of honor and evidence of long-suffering. He was indignant and not afraid to show it. Several times Lay dressed down his own lawyer George Secrest in front of the court. "Where are you going with this Mr. Secrest?" he asked from the witness stand, as if he were the prosecuting attorney objecting to his own lawyer's line of questioning.

An editorial cartoon in the Houston Chronicle showed Lay on the witness stand, barking, "You're incompetent, you're misleading the jury and you're wasting time!" Judge Sim Lake is pictured leaning in to Lay to remind him, "That's your lawyer, Mr. Lay."

Why was Lay doing this, openly displaying his impatience with his own lawyer? No one in the courtroom could be sure.

Secrest did seem thrown a bit off stride. Lay's lead attorney, Mike Ramsey, had been sickened with serious cardiovascular illness in the middle of the trial and Secrest had to move from being a backup to the lead. Reporters began hearing rumors that Lay had taken control of his defense, couldn't be reined in, couldn't stop being Chairman.

Lay was caught by prosecutors trying to phone potential trial witnesses before and even during the trial. He didn't seem to care that he was upbraiding his own attorney. Lay was angry that he was up there, that prosecutors felt free to second-guess his every decision as chairman of Enron, and that, courtesy of the trial, the whole world got to rummage through his personal finances like an unwanted guest through his medicine cabinet.

The "grandfatherly" Lay was not available for questioning, to his own lawyer and certainly not to Assistant U.S. Attorney John Hueston.

When Hueston began his cross-examination, the courtroom crackled with animosity. On direct, Lay had bemoaned his condition as a victim of character assassination. But Lay and Michael Ramsey had been vocal outside the courtroom, calling the prosecution's witnesses "trained monkeys" and "liars."

Presumably, the jury was not supposed to know that Lay and his lawyer said these things because they're not supposed to be watching TV or reading the newspapers or listening to radio coverage. So Hueston decided to clue them in, "Mr. Lay, have you engaged in any character assassination during this trial?"

"Do you include yourself on that list?" Lay fired back at Hueston, his hostility brimming over.

"Mr. Lay, I'm an assistant U.S. attorney and this is my job," Hueston said turning his back on Lay. "You can call me anything you want."

It went like that for three days, with Lay taking every opportunity to communicate his utter contempt for Hueston. The more it happened, the less it seemed a strategy and more an emotional release.

So this is the new perceived wisdom: Skilling surprisingly did better on the stand than Lay. But of course the problem with perceived wisdoms is that they are often wrong. The jury will let us know soon.

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