Trial of Enron's top ex-executives to play out in Houston

Houston Chronicle ^ | January 19, 2004 | MARY FLOOD

[Dog Gone]

Despite their plea to be tried outside of Houston, a federal judge ruled today that the fate and future freedom of ex-Enron chieftains Ken Lay and Jeff Skilling will be put in the hands of a Houston-area jury.

U.S. District Judge Sim Lake found that the two former top executives and their chief accounting officer, Richard Causey, all accused of multiple counts of fraud and other felonies, could indeed find a fair jury among the citizens of Harris County and 13 adjacent counties.

"Although news coverage about Enron's collapse, this case, and these defendants has been extensive, the court is not persuaded that it has been so inflammatory or pervasive as to create a presumption that there exists a reasonable likelihood that pretrial publicity will prevent a fair trial," Judge Lake wrote in a 24-page opinion.

Though the judge cited several instances of the Houston Chronicle and other media columns and feature items poking fun at the defendants, the judge said "isolated incidents of intemperate commentary about the alleged crimes and their perpetrators do not rise to the level of 'inflammatory' where, as here, for the most part, the reporting appears to have been objective and unemotional."

Lake said "the facts of this case are neither heinous nor sensational" as he said were most of the cases cited by the defendants requesting the case be moved.

"Defendants have failed to persuade the court that perspective jurors have formed preliminary opinions about the defendant's guilt or who are connected to the case in a way that would render them biased cannot be identified and excused during (jury selection)," Lake wrote in response to defense polls that showed more Houstonians knew about the case and had bad things to say about Enron or the defendants than people polled elsewhere. "The court is not persuaded that there exists a reasonable likelihood that the court will be unable to impanel an impartial jury despite widespread knowledge of the case."

Skilling and Causey both face more than 30 charges, including fraud and conspiracy, that allege they manipulated Enron's bottom line to fool the stock market and enrich themselves. Ex-Chairman Lay also faces seven counts of fraud and conspiracy and four counts of bank fraud that are to be tried separately. All three defendants have pleaded not guilty to all counts.

Skilling's chief trial attorney said he hopes an impartial jury can be found in Houston.  

"What we want is a fair trial. Nothing more, nothing less. If that is to happen in Houston, hopefully we will have substantial latitude in selecting our jury," said attorney Daniel Petrocelli.

Enron Task Force Director Andrew Weissmann had no comment on the ruling, but prosecutors had argued there was no reason to leave Houston since two area juries have already rendered reasonable verdicts in Enron-related cases.

They noted that federal judges here found juries in the 2002 obstruction of justice trial of Enron accounting firm Arthur Andersen and the 2004 trial of Enron and Merrill Lynch executives in the Nigerian barge case. Andersen was convicted as were five out of the six barge defendants.

Though ex-Chief Executive Officer Skilling commissioned a poll that showed one-third of the potential jury pool members contacted called him negative names, the government argued that means two-thirds did not have a negative opinion and could easily be potential jurors.

"Far from demonstrating that citizens residing within the Houston Division are brainwashed or so victimized as to be unable to set aside any knowledge or tentative opinions, the process in each case revealed a small minority of the panel with preconceived notions that the respective courts properly addressed," the prosecutors wrote.

Skilling and his co-defendants asked in November that the trial be moved out of Houston, arguing that this city was too deeply altered by the scandal to be fair to its former corporate leaders and that the local publicity, especially in the Houston Chronicle, has prejudiced the jury pool here.

Skilling showed the judge a poll in which one-third of area residents surveyed associated his name with negatives like "pig," "snake," and "economic terrorist."

That was about three times the percentage of people in Atlanta, Denver and Phoenix who came up with negative responses. Skilling suggested the judge move the case to those cities, and Causey also suggested New Orleans.

Prosecutors argued that the publicity about Enron's tragic fall was worldwide and that Houston publicity was not inflammatory.

The government said the surveys submitted by Skilling and raw data they since received from Lay do not demonstrate presumed prejudice in Houston. They note that when asked to name former top executives from Enron, Houston respondents failed to identify Skilling in one defendant-sponsored survey.

Legal experts said that when a judge refuses to move a case and is able to pick a presentable jury, there is very little chance of the matter being overturned on appeal.

The next issue in this case is when the trial will take place. Prosecutors and Lay want it as soon as possible, maybe as soon as this spring. Skilling wants September 2005, and Causey wants it later, maybe spring of 2006. The judge is known for having a speedy docket, but he has also noted that this is an unusually complex case.

[CrawDaddyCA]

Those scumbags deserve everyting they get, plus some. A lot of good people lost everything they had because of them.

[Dog Gone]

This would be a jury summons I'd like to get.

[ladyjane]

While that may be true it - is never wise to put 'everything you have' into one company. What happened was very sad, no question, but people who lost everything were gambling, not investing.

[lilylangtree]

When is the trial for Global Crossing executives? This is the defunct company that DNC Terry McAuliffe made his $18 million ill-gotten gains from.