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The case of former Enron CEO Jeffrey Skilling landed at the Supreme Court today. The once high-flying energy trader is now serving a 24-year sentence in federal prison. Today, his lawyers told the court that his conviction should be reversed for two reasons: because one of the statutes used to convict him is unconstitutional; and they say because Skilling did not get a fair trial.
NPR legal affairs correspondent Nina Totenberg reports.
NINA TOTENBERG: Enron's collapse put more than 5,000 people out of work, wiped out more than $2 billion in employee pensions, and rendered worthless $60 billion in Enron stock. One-time CEO Skilling was accused of knowing the company was a hollow shell, hiding that fact from the shareholders and at the same time, selling his own stock before word got out that the company was crumbling. The government convicted Skilling of 18 counts of securities fraud and lying to auditors, and also for conspiracy to deprive the shareholders of his honest services.
Skilling's lawyers contend that the honest-services law, a key anti-corruption statute, is unconstitutionally vague and that it tainted the entire trial. In addition, they say, that because the company's collapse was devastating to the Houston economy and because Enron's leaders were pilloried in the local media, that Skilling could not get a fair trial in Houston, where Enron was based. Today, Skilling's lawyer, Sri Srinivasan, told the justices that passions ran so high in Houston that the entire U.S. attorney's office - some 150-lawyer strong - recused itself from the prosecution.
When the case came to trial, said Srinivasan, 80 percent of the jury pool expressed anger or negative views of the defendants. He said the trial judge not only refused to move the trial out of Houston, but he spent only five hours conducting jury screening. Compare that, said Srinivasan, to the Oklahoma City bombing trial, which was moved away from that city and still, the judge spent 18 days on jury selection.
Justice Ginsburg: I'm unaware of any case where we've required a change of venue when there's no life or limb at stake. The Oklahoma City bombing case, she noted, was a capital case.
Justice Alito: If there had been a more lengthy questioning of potential jurors, do you still think there was no possibility of getting an unbiased jury? Answer: The danger is that in a case like this, where only 46 potential jurors are questioned, there's just too great a risk of an unfair trial. There may be 12 jurors who could be unbiased, but the ordinary screening procedure is not adequate.
Justice Breyer: When does a judge have to do more than the ordinary? Answer: There has to be a wave of public passion, with a pervasive animus directed towards the defendants.
Lawyer Srinivasan then turned to the second part of his argument, the honest-services statute, which makes it a crime for corporate officers or government officials to deprive shareholders or citizens of their honest services. Srinivasan said the law is so vague, it is not clear what's illegal conduct.
Chief Justice Roberts: I don't understand the difficulty. Skilling concealed information from shareholders in a way that harmed them. Justice Ginsburg: He owned shares and knew their value was inflated. Shareholders didn't have that information. Skilling then sold his shares and made a killing. The shareholders were left holding the bag. Answer: The government's definition of honest services is so broad, it would convert any lie in the workplace into a felony - even lying about using a computer for personal purposes.
Representing the government, Deputy Solicitor General Michael Dreeben contended that the jury selection in Skilling's case was perfectly proper. The judge, he said, worked with the lawyers to create a 14-page juror questionnaire to ferret out problems. Justice Sotomayor, the only justice who's been a trial judge, indicated some concerns. Can you tell me any other case of this kind where the questioning of potential jurors lasted only five hours? Answer: No.
Justice Breyer noted that one potential juror had lost $50,000 to $60,000 in the Enron collapse, and the judge refused to excuse her for cause. That meant Skilling's lawyers had to use up one of their limited number of automatic challenges. I've never heard of a judge refusing to excuse for cause a person who was herself a victim of the crime, remarked Justice Sotomayor. Justice Kennedy: It's hard for me to think that the jury screening could've been shorter, even in an ordinary case.
The government's Mr. Dreeben replied that the jury was, in fact, fair. And he noted that Skilling had been acquitted of nine insider trading counts, which he said would've been the first place the jury would've gone if it were looking to convict. Chief Justice Roberts: Oh, no, no. It would go to honest services if you think someone's fleeced your community. Pressed by other justices about what honest services means, Dreeben said: This case doesn't involve any subtle fiduciary duty. It involves the duty not to lie to shareholders.
Justice Sotomayor: If I'm a city councilperson and I vote for a tax break that I can benefit from, is that a denial of honest services? Answer: If you don't disclose it, and it's on a business property, it could be.
Nina Totenberg, NPR News, Washington.
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