The following is a rundown of the key witnesses among the 54 people who testified for the prosecution and defense in the fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling. Both defendants testified.
— Kenneth Lay. The 64-year-old company founder repeatedly snarled, sneered and bickered with a prosecutor and even challenged one of his own attorneys over more than five days of testimony in his own defense. Lay blamed Enron's December 2001 implosion on a lethal combination of bad press that siphoned market confidence in a skittish market roiled by the 2001 terrorist attacks. He insisted he told the truth when he praised Enron's strength to employees and investors throughout the fall of 2001 when the company was spiraling.
But on cross-examination, Lay was bombarded with a slew of written warnings about Enron's accounting integrity that he received from various employees. Lay said he was too busy trying to save the company to investigate the complaints.
He also defended his former wealth and his use of Enron as a bank. Lay borrowed more than $70 million from Enron throughout 2001 and repaid those loans with company stock. He kept those sales to himself because he didn't have to disclose those sales publicly until 2002 under disclosure regulations in place at the time. But he told employees in September 2001 that he had bought stock — a fraction of what he sold — and encouraged them to do the same.
— Jeffrey Skilling. Like the prosecution witnesses before him, Skilling lacked physical evidence to back up his claims that his accusers either lied about incriminating conversations and meetings or misunderstood them.
He defended financial structures that prosecution witnesses said were created to hide losses from poor assets and investments as proper. He also defended partnerships created and run by former Chief Financial Officer Andrew Fastow that bought Enron assets or acted as an independent investor, saying they were proper, although he acknowledged in retrospect that they were a bad idea.
Skilling's fate could hinge largely on whether jurors believe his story about his allegedly illegal stock sales. He said he couldn't remember placing an order to sell 200,000 shares of his Enron stock in early September 2001, three weeks after his abrupt resignation, although jurors heard an audiotape of him doing so on a telephone call to his broker. That sale was held up, and he ended up selling 500,000 shares for $15.5 million on Sept. 17, 2001. He insisted his fear of a market roiled by the Sept. 11, 2001 terrorist attacks prompted the sale.
— Andrew Fastow. The trial's most anticipated prosecution witness said he had no written proof that he and Skilling discussed the ex-CFO's use of partnerships to help Enron manipulate earnings, but Fastow insisted that they "committed crimes together." He also said Lay knew from discussions with Fastow and others that Enron was in serious financial trouble by the fall of 2001, even as the company founder gave rosy reports of its health to investors and employees. Fastow pleaded guilty to two counts of conspiracy in January and agreed up front to serve the maximum 10-year prison term for those crimes, admitting to orchestrating schemes to manipulate earnings through his partnerships while skimming millions from other scams on the side. He never minimized his own culpability and shed tears when he recounted how he roped his wife, Lea, into his crimes by enlisting her help to hide ill-gotten gains from a scheme hidden from Skilling and Lay.
— David Delainey, former head of Enron's trading franchise, Enron North America, who Skilling appointed in early 2001 to run the retail energy unit, Enron Energy Services. He said he reluctantly acquiesced in March 2001 to a Skilling-approved plan to move the retail unit's trading arm into the wholesale division to hide $200 million in losses. He said he suggested writing off the losses during a meeting, but Skilling looked at him and said, "What do you want to do?", which he took as code to "get in line" and go along with the manipulation. The next month Skilling told analysts the move was "driven by explosive growth of EES" and combining like functions would be more efficient. Delainey also corroborated earlier testimony that Enron raided reserves to pad earnings under pressure from Skilling, noting, "At Enron in Houston, we tended to be pretty fast and loose with our rules." Delainey pleaded guilty in October 2003 to insider trading.
— Ben Glisan Jr., Enron's former treasurer whose nickname at Enron was "Boy Scout." Glisan corroborated much testimony from earlier witnesses, saying Lay and Skilling knew financial structures called Raptors that he created were used to help Enron warehouse poor assets and hide losses so the company would look more successful than it was. Glisan is serving a five-year prison sentence for conspiracy for creating the first of those four structures. However, Glisan had no tangible proof, such as notes or e-mails, of conversations with Lay and Skilling that he said showed they knew Enron was in serious financial trouble as they praised it strength in public statements.
— Vince Kaminski, former head of research for Enron's Risk Analytics and Control group. He said that he and his staff were swept from the company's risk-assessment squad to another division after Skilling complained they had acted more like "cops" than deal facilitators. He also said he got a cold reaction at a late October 2001 executive meeting led by Lay when he said Enron needed to "come clean" about the Raptors in the weeks before the company crashed. He had refused to sign off on the Raptors because he didn't receive all legal documents related to it as he requested. Kaminski also testified that his duties as a consultant on deals throughout the company remained the same no matter what division he was in, and that Skilling never silenced his advice or opinions.
— Sherron Watkins, a former Enron vice president who famously warned Lay days after Skilling's August 2001 resignation that the Raptors could ignite an accounting scandal fatal to Enron. Congress in 2002 released her memos outlining her concerns to Lay — which proved to be prescient — and she served to bolster prosecution allegations that Lay knew Enron was in financial turmoil when he claimed publicly that the company was strong. Watkins also acknowledged that she has made a career as a public speaker about leadership failures at Enron, earning up to $30,000 for each of dozens of appearances, and said she expects that demand to continue whether or not Lay and Skilling are convicted.
— Max Hendrick III. A partner at Enron's former outside law firm, Vinson & Elkins LLC, and a defense witness, Hendrick described the firm's cursory probe in the fall of 2001 of Watkins' accounting complaints in which he and another attorney asked Enron executives and accountants about propriety of financial structures they had already approved. The probe concluded that Enron's only risk was a public relations problem if the structures gained outside attention. He said his firm would have had to bow out if a more extensive probe were required because of its relationship with Enron.