Jurors began deliberating Thursday in the first criminal trial to emerge from Enron Corp.'s 2001 collapse.
The jury of six men and six women deliberated less than an hour late Thursday after hearing lengthy closing arguments wrapping up the six-week conspiracy and fraud trial of four former Merrill Lynch & Co. executives and two former midlevel Enron executives. Deliberations were to resume Friday morning.
Jurors spent Thursday hearing from attorneys representing most of the defendants, who almost universally noted that in late 1999 when Merrill agreed to invest in barges so Enron could book a profit, the energy company wasn't the bankrupt, scandal-ridden poster child for corporate malfeasance it has become.
"So much for the illusion," said Lawrence Zweifach, who represents one of the Merrill defendants charged with conspiring to push through a bogus sale of barges to the brokerage in 1999 when Enron needed the profit to meet earnings targets.
"In reality, at the highest levels, Enron was nothing more than a snake pit," Zweifach said.
Zweifach, like other defense attorneys, told jurors in closing arguments in the six-week trial that his client, James A. Brown, thought the deal was legitimate. He said Brown didn't know top Enron executives _ including former finance chief Andrew Fastow _ were using shady partnerships and financing schemes to pocket millions at shareholders' expense.
Brown and three other former Merrill executives and two former midlevel Enron executives are charged with helping push through the brokerage's $7 million purchase of interest in three power plants mounted on barges when they knew the deal was really a loan because Fastow promised to resell or buy back that interest in six months.
The government says Merrill did Enron a favor as a way to obtain more investment banking business from the energy company.
The Merrill defendants say Enron wasn't obligated to resell or buy back the barges. Of the Enron defendants, former finance executive Dan Boyle testified he realized the deal had a buyback promise as he helped ensure Merrill's interest was bought out. Former in-house Enron accountant Sheila Kahanek testified she always opposed any buyback guarantees.
Kahanek's attorney, Dan Cogdell, gave an impassioned argument noting prosecutors presented little evidence against his client except the word of several witnesses who were more involved with the deal and some of whom received immunity deals from the government.
He likened allegations that Kahanek was in on the alleged scheme to a car wash "where your sins of Enron can get washed away as long as you know the secret password: Sheila made me do it," he said.
Prosecutors have presented numerous incriminating e-mails written by or received by the other defendants, but few written by Kahanek. Unlike witnesses who testified against her, she didn't sign off on the barge deal and prosecutors have no prior testimony from her indicating she has lied about her involvement.
Cogdell called the case against Kahanek a cancer that she had been fighting long enough, to which prosecutor Matt Friedrich responded, "No one chooses to have cancer. These people are here because of choices they made for themselves."
Zweifach said Brown, who also is charged with lying to and obstructing a grand jury investigating Enron, believed Merrill was at risk of losing its investment.
David Spears, who represents former Merrill vice president William Fuhs, who answered to Brown, reiterated that Fuhs understood from the beginning only that Enron had promised to keep marketing the barges to other buyers _ not buy them back if those efforts failed. He also said Fuhs wasn't in on conference calls or meetings about the deal, and merely shuffled documents between executives.
Boyle's attorney, William Rosch, said his client didn't live the lavish lifestyles enjoyed by Enron's former top echelon, nor did he know he was "with a group of people who were a partnership in crime."
"They were the most vicious people in business," he said. "As long as they lined their pockets, they didn't care how many pockets they turned inside out."
All six defendants, which include Daniel Bayly, former head of investment banking at Merrill, are charged with one count of conspiracy and two counts of wire fraud. Boyle also is charged with lying to investigators for a Senate subcommittee.