HOUSTON – A federal jury Wednesday began deliberating the fate of former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling, accused of fraud and conspiracy that preceded the collapse of the Houston-based energy giant in one of the biggest corporate scandals ever.
Jurors got the blockbuster case after two-and-a-half days of closing arguments from prosecutors and defense lawyers and after more than 14 weeks of testimony. They are deciding 28 criminal counts against Skilling, Enron's former chief executive, and six against Lay, the company founder.
Both face long prison terms if convicted.
The trial is the premier case to emerge from the government's 4 1/2 year investigation into Enron's 2001 descent into bankruptcy protection. More than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs were lost in the company's flameout.
The government, through its 25 witnesses, attempted to tie Lay and Skilling to the company's crash after revelations of hundreds of millions of dollars of debt hidden by shady accounting schemes and profits inflated by accounting tricks orchestrated by top executives.
Skilling, who quit Enron four months before the company filed for bankruptcy protection in December 2001, and Lay each spent more than a week on the witness stand proclaiming their innocence, arguing that market forces fueled the company's collapse. They were among the 29 witnesses called by the defense.
In a two-hour rebuttal argument Wednesday, prosecutor Sean Berkowitz tried again to persuade jurors that Lay and Skilling are crooks and liars. He urged the panel to toss aside defense claims that the government criminalized innocent comments, honest mistakes and normal business practices.
"They lied to their investors. They omitted critical facts, and at key times they put their own interests above those of their shareholders. And they lied, ladies and gentlemen, from the stand," Berkowitz said forcefully.
"It's not business as usual. Don't let them fool you," he said.
Berkowitz responded to impassioned closing arguments the defense teams presented Tuesday, which assailed the government for creating crimes where none existed because the former top two executives had to pay for the suffering of employees and investors.
Berkowitz dismissed the notion Wednesday. He said crimes were committed by former executives who pleaded guilty to wrongdoing and by Lay and Skilling. He said the government presented "overwhelming evidence" that Lay and Skilling led an overarching conspiracy to cook Enron's books.
"This isn't Hollywood, ladies and gentlemen, We didn't make this up," Berkowitz said. "They have mocked the case, ladies and gentlemen, and said it was fictional. We make no apologies for what we presented here."
On Tuesday lead Skilling lawyer Daniel Petrocelli said prosecutors, unable to dig up tangible proof, found mouthpieces in a string of ex-Enron executives who pleaded guilty to crimes they didn't commit to avoid lengthy prison terms and expensive legal battles. They said what the government wanted to hear, he said.
"They had their eye on the prize. The prize was Jeff Skilling and Ken Lay, and that's why we're here," Petrocelli said. "Documents don't lie. People do. So you create evidence."
Lay lawyer Bruce Collins on Tuesday echoed what U.S. District Judge Sim Lake told jurors when they were selected Jan. 30. He said another judge presiding over numerous Enron-related lawsuits in another courtroom will decide whether Enron's former top executives should empty their pockets to repay investors.
The job facing the jury in the two defendants' fraud and conspiracy trial is to decide if they are felons.
"Today you decide if Ken Lay is locked in a cage for the rest of his life," Collins told the eight-woman, four-man panel.
On Thursday, Lay will be on trial again — before Lake, but without a jury — in a case related to his personal banking. In that case, the government contends he obtained $75 million in loans from three banks from 1999 through 2001 and reneged on agreements not to use the money to carry or buy margin stock. He is charged with one count of bank fraud and three counts of making false statements to banks in the case.
Lake plans to issue his verdict in the banking case, which is expected to last several days, after jurors in the larger conspiracy case render theirs.