Ken Lay
Pat Sullivan  /  AP file
Enron founder Kenneth Lay and his wife Linda huddle under an umbrella as they leave the courthouse at the end of week 14 of his fraud and conspiracy trial Thursday earlier this month.
updated 5/14/2006 2:31:51 PM ET 2006-05-14T18:31:51

The jury in the federal fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling is about to stop listening and start talking.

But before the panel retires to deliberate, lawyers on both sides of the trial that emerged from one of the biggest corporate scandals in U.S. history have one last shot at persuading jurors to decide the case their way.

In a dozen hours of closing arguments to begin Monday, prosecutors and the defense teams have six hours each to boil down the highlights of 54 witnesses, mountains of documents and hours of video and audiotapes they want jurors to focus on. Deliberations are to begin Wednesday.

"For prosecutors, it's their chance to remind jurors what the case was all about and show them how this evidence was woven together to paint a damning portrait of the culture of corruption that lived inside Enron and how these defendants were part of that culture," said Robert Mintz, a former federal prosecutor.

"The defense is going to reinforce the theme they struck at the beginning — that while the government may have said their clients made bad decisions, they really did nothing more than any other CEO would have done under the same circumstances: Make every effort to try to save the company they spent a substantial portion of their lives to build," he said.

Sam Buell, a former prosecutor with the Justice Department's Enron Task Force who is a visiting professor at the University of Texas School of Law, said it will be critical for prosecutors and the defense teams to tell a coherent, compelling story. The sprawling nature of the case may leave the panel looking for a big-picture view.

"A jury can't help but feel a little bit at sea. They're looking for a lifeline to pull it all together, and the trial lawyer needs to provide that to them. So, the thematics are important, and we'll hear them from both sides," Buell said.

Buell added that prosecutors will encourage jurors to see their case as a puzzle with pieces that must be viewed as a whole. The defense teams will seek to pick it apart, he said.

The government contends Lay and Skilling repeatedly lied to employees and investors by spouting false optimism about Enron's financial health when they knew bad news was brewing and that unsustainable accounting tricks had crafted illusory success in the company's final years.

The two men, who both testified, counter that no fraud occurred at Enron other than a few executives who skimmed millions from hidden scams. They say a lethal combination of bad publicity and lost market confidence fueled Enron's swift spiral into bankruptcy protection in December 2001.

Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors that address his actions from 1999 through his abrupt resignation after only six months as CEO in mid-August 2001. Lay faces six counts of fraud and conspiracy focusing largely on his actions after he resumed as CEO upon Skilling's departure.

Kathryn Ruemmler, deputy director of the Enron Task Force, will launch the government's closing argument Monday after U.S. District Judge Sim Lake reads lengthy instructions to the eight-woman, four-man panel.

On Tuesday, lead Skilling lawyer Daniel Petrocelli, who questioned his client and cross-examined the prosecution's most key witnesses, will present Skilling's closing argument. Then four Lay lawyers, including lead attorney Michael Ramsey, will each speak for the ex-chairman. Ramsey was sidelined throughout the defense's five-week case recovering from having stents implanted in two arteries.

On Wednesday Sean Berkowitz, the task force director, is slated to give jurors the government's last word before the panel takes the case.

The trial lacked obvious smoking guns, and boils down to whom jurors choose to believe.

The case's most anticipated witnesses were the defendants and Andrew Fastow, the former chief financial officer who ran lucrative scams behind their backs. Fastow was among eight ex-Enron executives who have pleaded guilty to crimes and testified for the government as part of plea deals.

Skilling spent 7 1/2 days on the witness stand, growing animated when he recalled Enron's halcyon days and tense at being pegged a liar and crook, declaring from the outset, "I am absolutely innocent."

Lay had been expected to charm jurors, but the ex-chairman was largely combative during nearly six days of contentious testimony, challenging a prosecutor and even questioning his own lawyer.

Fastow, the admitted architect of schemes that helped sink Enron, never minimized his own culpability as he repeatedly linked Lay and Skilling to a web of lies that promoted Enron as healthy and stable. He also laid bare his shame at roping his wife, Lea, into helping him hide illegal kickbacks from some of his schemes, for which she pleaded guilty to a tax crime and served a year in prison.

The government framed Fastow as part of an ensemble cast rather than a star.

Other key prosecution witnesses who also pleaded guilty to crimes included former treasurer Ben Glisan Jr., who is serving a prison term for crafting fraudulent financial structures Lay and Skilling say were proper; David Delainey, former head of trading and retail energy units who Skilling approved of a scheme to hide losses; and Vince Kaminski, a former top risk analyst who said his warnings of improper structures or conflicts of interest were swept aside or fell on deaf ears.

Sherron Watkins, who gained fame in 2002 for her unsuccessful effort to warn Lay of impending doom months before Enron flamed out, also testified that her concerns were ignored. She also acknowledged that she improperly sold stock based on her discovery of impending problems.

The defendants said those witnesses lied, made faulty judgments based on incomplete information or misunderstood what they believed to be incriminating conversations.

"The bottom line for this case is it is a classic credibility contest," said Roma Theus, vice chair of the corporate integrity and white collar crime committee of the Chicago-based Defense Research Institute and a former federal prosecutor. "The jury will decide what they will accept and what they won't."

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