Judge: Lay, Skilling Trial On For Next Week

HOUSTON – The judge overseeing the fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former CEO Jeffrey Skilling on Thursday rejected their last-minute bid to halt the trial, saying they couldn't credibly argue the jury pool is too biased when the panel hasn't been chosen.

The defense teams wanted Lake to delay the case set to begin with jury selection on Monday pending the outcome of their appeal of his decision to keep the case in Houston, where they say they cannot find a fair jury.

"Since jury selection is not completed, defendants are in no position to credibly argue that the jury that will hear the case will not be fair and unbiased," U.S. District Judge Sim Lake said in an order issued shortly before the final pretrial hearing in the case on Thursday.

The judge's order said more than 100 potential jurors who "have had to put their lives on hold for several months as they waited to learn whether they would be selected" will be at Houston's federal courthouse Monday.

"The trial of this case also raises significant issues of national interest. Any delay of the trial would forestall a resolution of important public issues that need a resolution sooner rather than later," Lake wrote.

Enron crashed into bankruptcy in December 2001 upon revelations of hidden debt and inflated profits. Skilling is accused of promoting a falsely rosy picture of a financially wobbly Enron to investors. Lay faces seven counts of fraud and conspiracy for perpetuating the alleged scheme after Skilling resigned in August 2001. Both have pleaded not guilty.

The defense teams said they would ask the 5th U.S. Circuit Court of Appeals to halt the trial pending their appeal, but after the hearing, both indicated they were ready to go on Monday.

"We're looking forward to starting," said Daniel Petrocelli, Skilling's lead trial lawyer. "Finally we're going to get in a courtroom and deal with some real facts and evidence."

Michael Ramsey, Lay's lead lawyer, said it was "very, very troubling" that 18 people in the pool said they hadn't followed the case. "It's just a bad time and a bad venue to pick a jury," he said.

Still pending is a move by prosecutors to drop four of the 35 criminal counts pending against Skilling, sending him into the trial facing 31 counts of fraud, conspiracy, insider trading and lying to auditors.

The government told the defense teams last week they intend to drop four wire fraud counts against Skilling that were related to counts that had been pending solely against Richard Causey, Enron's former chief accounting officer. Causey pleaded guilty to securities fraud last month in a deal with prosecutors.

Prosecutors said in filings they'll follow through on dropping four wire fraud counts if the defense teams accept their streamlined indictment that removes references to Causey as a defendant.

At Thursday's hearing Lake rejected a defense request to require the government to seek a new indictment from a grand jury without Causey as a defendant, which would postpone the trial. Prosecutors could decide Monday to drop the four fraud counts.