Jury Selection to Start in First Enron Trial

The first Enron (search) criminal trial, over an alleged sham sale of barges, opens Monday with an expected rapid jury-selection process and defense questions about a last-minute revelation of information from the prosecution.

About 100 prospective jurors will gather to answer questionnaires and then be questioned, mostly by the judge.

The jury will decide whether four former Merrill Lynch & Co. (search) executives and two former Enron executives conspired to help manipulate the energy company's books in December 1999.

Specifically, the six are charged with conspiracy for allegedly taking part in pushing through a sham sale of Nigerian barges to Merrill to help the energy company appear to have met earnings targets.

Defense lawyers plan to raise questions about statements made to investigators by former Enron finance chief Andrew Fastow (search) that could favor the defendants.

"That's not going away," said William Rosch III, who represents one of the defendants, former Enron finance executive Dan Boyle, who was on Fastow's staff.

Prosecutors don't intend to call Fastow to testify, but they contend he played a key role in the deal central to the case.

Defense attorneys cried foul last week because they had learned about Fastow's statements only days before the trial.

The government says the Fastow statements don't constitute material prosecutors are obligated to provide, but they informed the defense out of an "abundance of caution."

Enron, which in 2000 claimed to have $100 billion in revenues, went bankrupt in December 2001 when revelations surfaced that its financial success was a facade.

Prosecutors say Fastow verbally promised that Enron would buy back the barges from Merrill within six months, wiping out the legitimacy of the sale of the floating power plants.

Last week prosecutors revealed Fastow had told investigators he wasn't explicit about the certainty of the buyback, which is central to the conspiracy charges.

Prosecutors, however, contend the defendants got the message.

It's unclear exactly when Fastow made those statements, but he has been cooperating with the government since pleading guilty in January to two counts of conspiracy.

Fastow followed through on the buyback when LJM2, one of his partnerships created to help Enron hide debt and inflate profits, bought the barges in June 2000. At the time, LJM2 was treated as a separate entity from Enron even though Fastow ran it.

In addition to Boyle, the defendants are: Sheila Kahanek, a former in-house Enron accountant; Daniel Bayly, formerly Merrill Lynch's chairman of investment banking; Robert Furst, former managing director who answered to Bayly; James A. Brown, former head of Merrill's asset lease and finance group; and William Fuhs, former vice president who answered to Brown.