The Longest Night for the Enron Defense

It was by all accounts a brutal day for Ken Lay and Jeffrey Skilling, the last of the Mohicans at Enron. They were maligned and derided for about four hours by a federal prosecutor who skillfully asked jurors to put themselves in the position of the defendants as they managed Enron into the world's biggest bankruptcy case. The best blog by far about the trial is the one offered by the Houston Chronicle, whose reporters are all over the trial in a way you rarely see any more in high-profile cases.

The Chronicle highlights a brief part of the closing statement by government attorney Karen Ruemmler that I think is particularly interesting, especially if you haven't been following the trial very closely as it has lumbered along. Ruemmler had taken the jury back to September 2001, when the Wall Street Journal was asking Lay questions about an off-the-book partnership named LJM, run (illegally, we now know) by former Enron CFO Andrew Fastow. One of the questions, the prosecutor noted from the Journal was: "How much money has Mr. Fastow made at the LJM partnerships? How does that compare to his (Lay's) compensation at Enron?"

"What does Mr. Lay do?" Ruemmler asked? "Does he ask him, 'Hey Andy, how much money do you make?' No. He doesn't want to know... "Over and over and over again, Mr. Lay chose to not ask hard questions. He did so to try to stick his head in the sand. The law says you can't do that," Ruemmler said. That's a smart way to personalize the Enron story for jurors; a shrewd device designed to undermine the defense strategy that Lay and Skilling were doing their best as brilliant managers only to be undone by ill-intentioned underlings, skittish investors and the media.

For Lay and Skilling, then, this is surely the longest night. An awful lot of invective was hurled their way and they know that the eight women and four men of the jury who will determine their fate will get to sleep on all of it, and perhaps have it settle in their minds, before the defense attorneys get to rise and make their case. And for the defense attorneys, they surely will be tweaking their prepared remarks to address some of the more important points that Ruemmler made. We are now in the lull of the battle with only side having been permitted to lob its shells.

Tomorrow, the jury will get a completely different reality to ponder; a reality in which Lay and Skilling were honest, decent men trying to do the best they could. Tomorrow those same jurors who were told that the defendants are sinners will be told they are, if not saints, than at least not crooks. Today was a bad day for the two men who right or wrong have come to symbolize corporate greed. Tomorrow will be better. But whether in the end it'll be good enough to allow them to avoid prison is the question of the week. And perhaps next week, too.

By  |  May 15, 2006; 8:15 PM ET
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And for anyone who's seen the documentary "The Smartest Guys in the Room," it will be a long row for the defense to hoe.

Posted by: Nick | May 16, 2006 04:45 AM

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