Enron Fraud Trial Moves to Closing Arguments
RENEE MONTAGE, host:
In Houston today, closing arguments begin in the trial of former top Enron executives Kenneth Lay and Jeff Skilling. The two men are accused of fraud and conspiracy and face decades in federal prison if convicted. NPR's Wade Goodwyn reports.
WADE GOODWYN reporting:
For weeks, the Enron jury watched and listened as one Enron manager after another testified that the company manipulated its earnings reports. They said there were a variety of methods transferring losses from one division to another, siphoning reserve accounts, and the use of off the books partnerships to hide losses from the company's failed projects. To varying degrees, these witnesses pointed their fingers in the direction of Enron president and CEO Jeff Skilling. Andrew Fastow, Enron's former chief financial officer, went so far as to say that he and Skilling committed crimes together. And top Enron accountant Sherron Watkins accused Ken Lay of doing nothing after she warned him that Enron was on the verge of imploding in a wave of scandal.
Chris Bebel is a former federal prosecutor who specializes in white collar crime.
Mr. CHRIS BEBEL (Former Prosecutor): Look for the prosecutors to seek to show that Mr. Lay was at the very least put on notice that there was widespread corruption in the company and Mr. Lay thereafter turned his back on that information.
GOODWYN: Nearly a dozen of the government's witnesses were Enron executives at the level just below Ken Lay and Jeff Skilling. The fact that these executives worked so closely with the defendants speaks to the strength of the prosecution's case. Attorneys for Lay and Skilling have responded by alleging that these Enron executives, though they have already confessed to their guilt, are in fact not guilty, that each and every one has been pressured into pleading guilty by overreaching and unscrupulous prosecutors.
Each defendant is allowed three hours of closing argument. Bebel says the breadth of the government's case will force defense attorneys to spread themselves thin. They must be careful how much time they devote to attacking the credibility of each witness.
Mr. BEBEL: There are so many witnesses saying so many things that the defense team will use up so much of their time being back on their heels, being in a defensive posture trying to bat away the arguments and assertions that have been directed at them.
GOODWYN: Defense lawyers will say that their clients did not nothing that isn't routinely done by corporate executives everywhere. Yes, Enron was a company that pushed the accounting envelope. But the company's creativity and risk taking culture had proved enormously successful in the past. Lay's lawyers will tell the jury that their client believed in Enron until the bitter end, that he wasn't lying to investors about the true financial condition of the company, he was simply saying what he thought to be the truth.
Prosecutors will paint a picture of a corporate culture that valued earnings per share over integrity, of executive hubris, a leadership so arrogant they thought the rules didn't apply to them. In the end, the jury's decision may come down to the credibility of Skilling and Lay. Does the jury believe the Enron witnesses who've confessed to their crimes, or the defendants who say there were no crimes, at least not by them?
Wade Goodwyn, NPR News.