Lay makes final plea

Skilling also asks jury to acquit them

May 17, 2006|By THOMAS S. MULLIGAN | THOMAS S. MULLIGAN,LOS ANGELES TIMES

HOUSTON -- Lawyers for Kenneth L. Lay and Jeffrey K. Skilling, in an emotional last pitch to jurors who could send their clients to jail for decades, accused the government yesterday of building a sham case against the former Enron Corp. leaders because it needed scapegoats for a corporate scandal.

With "their eye on the prize" of two high-profile convictions, federal prosecutors coerced witnesses, selectively used "snippets" of taped presentations and misrepresented documents to concoct their case, Daniel M. Petrocelli, Skilling's lead lawyer, charged during his 3 1/2 -hour closing argument yesterday morning.

Chip B. Lewis, one of four defense lawyers who spoke for Lay, raised the ante in the afternoon with an angry broadside against prosecutor John C. Hueston, who he said had deliberately ignored evidence to unfairly frame a damaging question in cross-examining Lay two weeks ago.

Lewis, goateed, burly and well over 6 feet tall, leaned over the government's table toward the much slighter prosecutor and said: "Don't come to Houston, Texas, and lie to us."

The eight-woman, four-man jury, though paying close attention, did not visibly react to Lewis' outburst. But Lay's wife, Linda, and her daughter, Robin, burst into brief applause from the front row of spectators.

Enron founder Lay, 64, and former chief executive Skilling, 52, are accused of lying to the public about the company's financial health and conspiring with subordinates to inflate profits and hide losses through what the government terms "accounting trickery." Skilling faces 28 counts of conspiracy, fraud and insider trading. Lay is charged with six counts of conspiracy and fraud.

Lay also faces several bank fraud counts which will be the subject of a separate bench trial scheduled to begin tomorrow while the jury in the main case is deliberating.

U.S. District Judge Simeon T. Lake III also will hear the evidence in that case but will decide the verdict alone. Lake said he would withhold his decision until the jury has delivered its verdict in the main case.

Enron's collapse in December 2001 created a public outcry over corporate chicanery and led to congressional hearings and the formation of a federal task force to probe the company's downfall.

Co-lead prosecutor Kathryn H. Ruemmler, in the government's closing argument Monday, tried to inoculate the jury against what she said would be a display of "passion" and "indignation" by defense lawyers yesterday. She warned jurors not to be swayed by theatrics.

Petrocelli, alluding to her remarks, began by saying: "I'm representing a man falsely accused and on trial for his life. Who wouldn't be passionate? Who wouldn't be indignant?"

The government, said Petrocelli, began its huge investigation of the failed energy company with the conclusion that Lay and Skilling were to blame. It then "reverse-engineered" the evidence to prove it, he said.

"A snippet here, a snippet there, and you create a new story after the fact," said Petrocelli.

He said the government built its case mainly by pressuring Enron subordinates with the threat of long prison terms and financial ruin if they refused to cooperate.

Prosecutors, said Petrocelli, want jurors to "discard and disregard years of real facts and listen to the word of people who've been robbed of their will."

Petrocelli said the government avoided talking about its central allegation of conspiracy during the 15-week trial because conspiracy is difficult to prove without documents and it didn't feel it had a winning case.

Instead, he said, prosecutors focused on Enron's spectacular collapse and its macho corporate culture.

"Culture is not a crime," Petrocelli said. "Bankruptcy is not a crime. Failure is not a crime."

Beginning a tag-team closing argument, Lay attorney Bruce Collins tried to rebut allegations that his client was motivated by greed. In February 2001, when Skilling succeeded Lay as Enron CEO, Collins said Lay could have cashed out Enron stock and options worth $550 million. Instead he held onto most of his shares until Enron's bankruptcy wiped out 90 percent of his net worth, Collins said.

George McCall "Mac" Secrest focused on the government's witnesses, many of whom testified under plea deals. "Wind them up and point them in the right direction," Secrest said.

Finally, lead lawyer Michael W. Ramsey reminded the jurors of the government's burden of proof beyond a reasonable doubt. If a question causes someone to hesitate, he said, that is reasonable doubt.

"There is no question that a `not guilty' across the board" would be an unpopular verdict, Ramsey said.

"There may be a court in America that bends to the popular will," he thundered in conclusion, "but it's not this court!"

Thomas S. Mulligan writes for the Los Angeles Times.

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