The Sales Pitch Ends for Enron Execs

From the wave of convictions this morning for Kenneth Lay and Jeffrey Skilling, it's fairly obvious now that federal jurors in Houston didn't believe the former Enron officials when they testified at length and under oath that they didn't engage in any fraud and didn't even know it was going on inside the company.

It's a huge victory for prosecutors., a watershed case for them, and a crushing blow for the two defendants, who right up until the end thought they might be able to convince jurors that the apple wasn't rotten to the core. For the feds, they have the satisfaction of knowing that they have just a won a trial that wasn't nearly as easy as it appeared to be. Even though the trial took place in Houston, which bore the brunt of the Enron collapse, and even though the jury pool was full of people with nasty things to say about the defense, the case against the two men wasn't foolproof.

Both men now will be sentenced and sent to a federal prison and barring some miracle on appeal it won't be a short stay, either. In Lay's case, he likely will face what amounts to a life sentence given his age and the number of felony convictions he has received today. Remember, it wasn't just jurors who voted to convict him. It was the trial judge, too, who was looking at other charges, too. In Skilling's case, he is looking at scores of years in prison even if he does not receive the maximum sentence. Look for a big fight at sentencing over whether the men ought to go to prison pending their appeal.

Speaking of that appeal, both men have several legitimate issues to raise, including how the jury was selected, who served on the panel, how prosecutors cut deals with many former Enron officials and a number of more technical issues, including the jury instruction that allowed jurors to consider that both men could have been willfully ignorant about what happened at Enron and still be convicted. The trial may be over. But the case is not. We have not heard the last of the two men who raised Enron up so high and then commanded it down to the depths.

By  |  May 25, 2006; 12:25 PM ET
Previous: Verdict Reached in Enron Trial | Next: Why Skilling and Lay Were Convicted

Comments

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These are Bush's friends. If they go to jail at all it will only be for 2 1/2 years. Pardon me!

Posted by: skeptic | May 25, 2006 01:18 PM

People looking for justice will probably be frustrated. These men will never see the inside of a prison. They will be granted bail on appeal which will take years. The rich do not do prison time. Mr. Ebbers is a convicted felon but never saw prison. Lay and Skilling robbed millions of dollars and many people. If they had robbed a convenience store they might get some time. The rich don't do time.

Posted by: Lensist | May 25, 2006 01:19 PM

It never ceases to amaze me that white-collar business defendants continue to testify in their criminal trials, and their lawyers let them believe that they can outwit experienced, well-prepared prosecutors. Neither Skilling or Lay ever recovered from the massive hits on their credibility from the Photofete matter, which plainly showed to the jury that both believed that the rules didn't apply to them. That matter would never have come up if they hadn't testified. I think they both got what they deserved.

Posted by: Rick | May 25, 2006 01:20 PM

Nice to see a guilty verdict! These guys played the jury (and public) for fools and now they must pay It's one thing to rob people of millions, including retirement money, but quite another to claim they knew nothing about it.

- I hope the serve time, lots of it!

Posted by: John Hebert | May 25, 2006 01:40 PM

Skeptic and Lensist...you are both delusional if you think that these two arrogant morons won't spend serious time in jail, they are going down! Hooray!

Posted by: Glad in Houston | May 25, 2006 01:42 PM

Actually, it's not surprising at all. After all, these powerful men, and other CEO's like them, are surrounded by minions of yes-men who treat their decisions as manna from above. The "you just don't get it" Enron mantra came from the very top and was pervasive and effective in quieting any naysayers.

There are no reality checks in most executive suites and board rooms across America; perhaps that will now change but I'm not holding my breath.

The only surprising part is that their legal team agreed to continue representation when their clients clearly were on a path of self destruction.

Posted by: Cynthia | May 25, 2006 01:43 PM

Andrew, thanks for covering this issue. You'd be doing a tremendous public service if you keep us posted on the appeals and post-conviction maneuvers by the defendants. Thanks again.

Posted by: CT | May 25, 2006 01:43 PM

When do we consumers get our money back? I few years back, I heard the state of California was going to sue Enron. Whatever became of that?

Posted by: Hifi | May 25, 2006 01:54 PM

Individuals in power surround themselves with those who reflect back perspectives the powerful want to see.

When those around you hold up mirrors instead of a transparent "clear glass" reality, it's no wonder you can't see the truth.

Seek out the person whose voice makes you uncomfortable.

Posted by: Irene Hoffman | May 25, 2006 02:29 PM

So it sounds like these two are out of jail at this moment as it was reported "look for a big fight at sentencing over wether the men ought to go to prison pending they're appeal". I read this morning that the sentencing date was Sept.11,(a big coincidence at the pick of this date I'am sure), thats over 3 months away. If any of us in the real world were found guilty of even one felony our bonds would be recinded and we would be in jail NOW. So what about these criminals?

Posted by: Craig | May 25, 2006 03:00 PM

I agree with the earlier comment that at very least g.bush sr. golfing partner might see tyhe light of day fairly soon- I think Skilling will do justly deserved time. Now we need to find out where and retrieve every nickle we can find!

Posted by: tom/a-catman | May 25, 2006 03:11 PM

I'm sorry, why is the "willful blindness" instruction problemmatic? If they can't be held accountable for turning a blind eye to lawbreaking within the company, and they can't be held accountable for or even expected to know about major financial transactions that their companies make, what exactly do these corporate executive actually DO to earn their multi-hundred-thousand dallar salaries and their millions of dollars in stock options? If you would believe Lay, Ebbers, et. al, you would think that corporate CEOs are dumber than four-year-olds. Come on, they all knew exactly what was going on. You don't climb to the top of a big corporation by having no idea of how the company works.

Posted by: David | May 25, 2006 03:36 PM

To Glad in Houston: I don't recomend holding your breath until these guys are incarcerated. Bail will continue until sentencing. Bail will probably be continued pending appeal.

Posted by: Lensist | May 25, 2006 03:51 PM

The Problem with our Justice system is
it places a higher value on vengence
than solutions and prevention and learning from mistakes.

Offer Lay to trade full honesty for amnesty.
Tell us why you thought you were right to steal grandmas pension, exactly what principles were you working on, and how they they same principles used by your business friend Cheny.

Posted by: Just Your Type | May 25, 2006 04:56 PM

Does anyone find it interesting that Lay kept telling us how Christian he is? I am sick to my stomach of this administration and those closely associated with it invoking what great Christians that are while turning a blind eye to a host of sins - not the least of which: thou shalt not lie, thou shalt not kill (innocent Iraqi's and American soldiers). I have no problem with Christians who fall to temptation occasionally, but this is not the case with Lay or members of this holier than thou administration.

Posted by: | May 25, 2006 05:32 PM

It is shocking that we live in a country where these two fine upstanding pillars of society can be treated this way...

By all rights they should have been locked in stocks in the town square at the mercy of the thosands of ordinary Americans whose retirement money they stole. Imprisonment is far to good for these two.

Now let's see about recouping some of the 100's of millions they have hidden in Swiss accounts.

When we are through with these guys we should go after Bush, Cheney and Halliburton.

Posted by: Rich | May 25, 2006 06:39 PM

Good to see justice finally being served. I have one observation/question: Jeff Skilling was senior partner at McKinsey & Company, which is probably the most powerful behind-the-scenes entity in the corporate world; he was the lead person for the Enron account before he left to join Enron.

McKinsey is full of incredibly smart out-of-the-box thinkers and I wonder if anyone at McKinsey was involved in devising some of the ingenious (albeit illegal) schemes at Enron and why this question has never been asked...

Posted by: RichieRich | May 25, 2006 08:48 PM

I think that even if you offered Kenny Boy amnesty for the truth, he would still be lying. He doesn't even believe he was responsible for Enron's failure, let alone for the commision of any crimes.

Prison is a good place for dirt bags who are in denial. I hope they don't get bail for their appeal. That will nicely kick off the learning process that Just Your Type is so concerned with!

Their motives? Who the blip cares. They had all the obvious motives, including greed.

Posted by: realist | May 25, 2006 09:55 PM

One point in response to several comments. Bernie Ebbers has been convicted and sentenced to a substantial prison term. He remains free on bail only because his appeal is still pending, and will be argued before the U.S. Court of Appeals soon.

Posted by: Rick | May 26, 2006 09:46 AM

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