Jurors in the fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling finished their first full day of deliberations Thursday in the premier case to emerge from one of the biggest corporate scandals in U.S. history.
The eight-woman, four-man panel received the case Wednesday and had deliberated for about 9 1/2 hours by day’s end Thursday. Deliberations will continue Monday.
“It’s nerve-racking,” Skilling’s lead lawyer, Daniel Petrocelli, said about the wait for a verdict. Skilling’s trial was the California civil attorney’s first criminal case.
Skilling can wait in his legal team’s so-called “war room” in an office building across the street from the federal courthouse in Houston. But Lay went on trial again Thursday on bank fraud charges stemming from his personal banking.
The banking case is being tried without a jury before U.S. District Judge Sim Lake, who presided over the pair’s conspiracy case as well.
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. The jury aims to deliberate Monday through Thursday and take Fridays off, mirroring the conspiracy trial’s schedule.
Next door to Lay’s bank fraud trial, the first of three retrials of five former Enron broadband-unit executives was winding down in its third week, with closing arguments expected as early as Friday.
In that case, former unit finance chief Kevin Howard and former in-house accountant Michael Krautz are charged with conspiracy, fraud and falsifying records for allegedly using a sham deal to fake earnings in late 2000. Both testified this week that the deal was legitimate.
Last year’s three-month trial ended in a hung jury, and the other three ex-executives are to be retried in separate cases later.
Enron, once a Wall Street favorite, landed in bankruptcy protection in December 2001 amid scrutiny of hidden debt and inflated profits. More than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs disappeared in the failure of the company.
In the conspiracy case, Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy. If convicted on all counts, Skilling faces a maximum of 275 years in prison. Lay faces a maximum of 45 years.
The government sought to prove through 25 witnesses that both men repeatedly lied about Enron’s financial health when they knew accounting trickery and fudged numbers created a glossy illusion of success.
The defense countered through 29 witnesses, including Lay and Skilling, that neither did anything wrong and no fraud occurred at Enron other than that committed by a few executives who ran lucrative side deals behind their backs. The defendants attributed Enron’s collapse to bad publicity and lost market confidence.