A federal jury Wednesday finished their first day of deliberating the fate of former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling, accused of lying to investors and employees before the collapse of the Houston-based energy giant in one of the biggest corporate scandals ever.
Jurors got the blockbuster fraud and conspiracy case after two-and-a-half days of closing arguments from prosecutors and defense lawyers and after more than 14 weeks of testimony. They are deciding 28 criminal counts against Skilling, Enron’s former chief executive, and six against Lay, the company founder. Both face long prison terms if convicted.
Sean Berkowitz, director of the Justice Department’s Enron Task Force, made one last plea to jurors that they hold the defendants accountable for obfuscating the company’s financial problems in a web of lies as the government alleges:
“I’m asking you to send a message that it’s not all right. You can’t buy justice. You have to earn it,” the prosecutor said in the last word to jurors before they retired to a secluded room to reach a verdict.
The trial is the premier case to emerge from the government’s 4½ year investigation into Enron’s 2001 descent into bankruptcy proceedings in December 2001. Lost in the company’s flameout were more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.
The government, through its 25 witnesses, sought to tie Lay and Skilling to an overarching conspiracy to lie to employees and investors about Enron’s financial health when they knew accounting schemes hid hundreds of millions of dollars in debt, inflated profit and bad news.
Skilling, who quit Enron four months before the company filed for bankruptcy protection, and Lay each spent more than a week on the witness stand proclaiming their innocence, arguing that market forces fueled the company’s collapse and they committed no crimes. They were the stars of the defense’s 29 witnesses.
U.S. District Judge Sim Lake released three alternate jurors — two men and a woman — and advised the remaining eight-woman, four-man panel that they could deliberate only when all 12 are together in the jury room. He told jurors they could set their own deliberation schedule, which has yet to be announced.
In a two-hour rebuttal argument Wednesday, Berkowitz tried again to persuade jurors that Lay and Skilling are crooks and liars. He urged the panel to toss aside defense claims that the government criminalized innocent comments, honest mistakes and normal business practices.
“They lied to their investors. They omitted critical facts, and at key times they put their own interests above those of their shareholders. And they lied, ladies and gentlemen, from the stand,” Berkowitz said forcefully.
“It’s not business as usual. Don’t let them fool you,” he said.
Berkowitz responded to impassioned closing arguments the defense teams presented Tuesday, which assailed the government for fabricating crimes where none existed because someone had to pay for the suffering of employees and investors.
Berkowitz dismissed the notion Wednesday. He said crimes were committed by the former executives who pleaded guilty to wrongdoing and by Lay and Skilling. He said the government presented “overwhelming evidence” that Lay and Skilling led an overarching conspiracy to cook Enron’s books.
“This isn’t Hollywood, ladies and gentlemen. We didn’t make this up,” Berkowitz said. “They have mocked the case, ladies and gentlemen, and said it was fictional. We make no apologies for what we presented here.”
On Tuesday lead Skilling lawyer Daniel Petrocelli said prosecutors, unable to dig up tangible proof, found mouthpieces in ex-Enron executives who pleaded guilty to crimes they didn’t commit to avoid lengthy prison terms and expensive legal battles. They said what the government wanted to hear, he said.
“They had their eye on the prize. The prize was Jeff Skilling and Ken Lay, and that’s why we’re here,” Petrocelli said. “Documents don’t lie. People do. So you create evidence.”
Lay lawyer Bruce Collins on Tuesday echoed what U.S. District Judge Sim Lake told jurors when they were selected Jan. 30. He said another judge presiding over numerous Enron-related lawsuits in another courtroom will decide whether Enron’s former top executives should empty their pockets to repay investors.
The job facing the jury in the two defendants’ fraud and conspiracy trial is to decide if they are felons.
“Today you decide if Ken Lay is locked in a cage for the rest of his life,” Collins told the eight-woman, four-man panel.
On Thursday, Lay will be on trial again — before Lake, but without a jury — in a case related to his personal banking. In that case, the government contends he obtained $75 million in loans from three banks from 1999 through 2001 and reneged on agreements not to use the money to carry or buy margin stock. He is charged with one count of bank fraud and three counts of making false statements to banks in the case.
Lake plans to issue his verdict in the banking case, which is expected to last several days, after jurors in the larger conspiracy case render theirs.