Investor Relations Official in Spotlight at Enron Trial
RENEE MONTAGNE, host:
The second week of the trial of former Enron executives Ken Lay and Jeff Skilling ended yesterday with the first witness still on the stand.
Mark Koenig was Chief of Investor Relations at Enron. He's testified that he and Skilling mislead analysts about the true financial condition of key Enron divisions. This week, defense attorneys have tried to shake Koenig's testimony.
From Houston, NPR's Wade Goodwyn reports.
WADE GOODWYN reporting:
The heart of Mark Koenig's testimony over the last two weeks has been the quarterly conference calls in 2001, when and Jeff Skilling briefed analysts about the financial condition of Enron. Koenig told the jury that he and Skilling mislead analysts by either leaving out critical financial information or misstating it entirely.
At a time when the company's retail division was losing hundreds of millions of dollars every quarter, jurors heard audiotapes of Skilling extolling that division's outstanding performance. When Koenig was asked by prosecutors why he went along, he replied that if they'd told the truth, Enron's stock would have taken a big hit.
Chris Bebel is a former federal prosecutor specializing in securities fraud. He's been attending the trial this week.
Mr. CHRIS BEBEL (Former Federal prosecutor): Yes, the beauty of Koenig's testimony is that he gives the jurors a window to the inner workings of Enron, and makes it clear the defendants were very knowledgeable of the underlying financial intricacies. That's something that many people had not expected.
GOODWYN: This was not testimony that defense lawyers could leave hanging. So Skilling's lawyer, Daniel Petrocelli, played the conference call tapes in their entirety--hours and hours of it.
Mr. DANIEL PETROCELLI (Attorney for Jeff Skilling): We have been asking the court to allow the jurors to hear the conferences and the conference calls and meetings in full, and that's consumed the much, much of the time, but I think it's been extremely worthwhile. It's given jurors and the judge the opportunity to hear what was being said, as it being said, and in the context in which it was being said.
GOODWYN: While this didn't necessarily contradict Koenig's testimony, it did have a numbing effect, like layers of wallpaper mitigating by sheer volume, the snippets of tape prosecutors had played. Jurors struggled to keep their attention.
An important aspect of the defense's strategy is to make the case that not only are Jeff Skilling and Ken Lay innocent, but so are most of the 16 other Enron executives who've already pleaded guilty. The idea put forth is that these executives were duped or coerced into plea bargains by ruthless prosecutors.
Mark Koenig, for example, has already pleaded guilty to aiding and abetting securities fraud. He's facing ten years. Jurors were treated to the strange spectacle of Petrocelli trying to get Koenig to say that he was innocent of crimes he's already admitted to.
Mr. PETROCELLI: When the average person hears about a guilty plea, there's an assumption, and it's a reasonable one, that the person did what he or she is admitting having done. In this case, that assumption is not founded.
GOODWYN: The problem for Petrocelli was that every time he proposed that Koenig hadn't really committed any crimes, Koenig would forcefully disagree. Then he'd outline in detail for the jury the crimes he'd committed, why he'd committed them, and how devastating these deceptions had been for Enron.
And the jury would be reminded that Jeff Skilling had been sitting right next to Koenig while the analysts were being deceived, and never said a word.
Wade Goodwyn, NPR News, Houston.
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