May 16, 2006
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Enron Prosecutor Presses
Jury By GARY
MCWILLIAMS and JOHN R. EMSHWILLER
May 16, 2006; Page C3 HOUSTON -- Closing arguments in the criminal case against two former top Enron Corp. executives began with a federal prosecutor blasting former company Chairman Kenneth Lay1 and former President Jeffrey Skilling2 for using "artifice" and "cover stories" to mask financial woes while selling millions of dollars of their own Enron stock. Summarizing months of testimony by nearly two dozen government witnesses, prosecutor Kathryn Ruemmler3 accused the pair of believing themselves to be above the law and concocting elaborate deceptions to hide losses and manipulate earnings. ![[Kathryn Ruemmler]](Enron Closing Arguments WSJ 051606_files/HC-GH748_Ruemml_20060328175256.gif)
Repeating a theme advanced by prosecutors throughout the trial, she called on the eight-woman, four-man jury to convict the two of all charges because of the "choices" they made. "Hold them accountable for the choices they made and the lies they told," Ms. Ruemmler said. Final arguments began Monday in the federal trial of the former energy executives. The defense is expected to present its closing arguments Tuesday followed by a final government rebuttal Wednesday. The jury is expected to begin deliberations by Wednesday afternoon on the six counts brought by the government against Mr. Lay and the 28 counts against Mr. Skilling. The two men argued throughout the four-month-long trial that there was no fraud at the company other than thefts by former Chief Financial Officer Andrew Fastow and a few subordinates. They contend the company failed from a loss of investor confidence brought on by disclosures of Mr. Fastow's activities, and a concerted campaign by short-sellers and the media. They also argued that the government misinterpreted routine business activities and coerced former colleagues to testify falsely against them. Ms. Ruemmler mocked the pair's defense as nonsensical. Referring to their testimonies, she accused the pair of arguing "losses aren't really losses, stock sales aren't really stock sales and incriminating conversations are just innocent misunderstandings. Things like that. You know from the evidence, ladies and gentlemen, from your own common sense, that is absurd." WALL STREET JOURNAL VIDEO
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CNBC's
Scott Cohn reports4 on closing argument in the Enron trial
and comments from Ken Lay proclaiming his innocence. Reviewing the counts in the indictment and linking each to witnesses' testimonies and trial documents, she argued the defendants hadn't provided plausible rebuttals to the charges against them. Indeed, she turned Mr. Lay's own words on the witness stand against him. "Mr. Lay told you what summed up his view: 'Rules are important but you shouldn't be a slave to the rules.' That says it all. Mr. Lay, Mr. Skilling and his lieutenants were so arrogant they did not think the rules applied to them." Standing at a lectern and occasionally walking up to the jury, Ms. Ruemmler contrasted the two defendants' testimony with emails and other witnesses' statements. She said the two denied wrongdoing that was clear to other witnesses, citing the warnings they received in emails, memos and from subordinates in meetings. She urged the jury to view the witnesses who pleaded guilty to Enron-related crimes as corrupted by the culture created by Messrs. Lay and Skilling, and their cooperation as showing remorse for their crimes. She contrasted their willingness to "accept responsibility" with that of the two defendants' insistence on their innocence. She also compared the two defendants' occasionally angry responses on the witness stand with their public statements in the months before the company failed. "They're using that same tactic here in this courtroom that they used at Enron: ridicule, condescend, call someone a profane name," Ms. Ruemmler said. The two used financial gimmicks to prop up struggling retail energy and telecommunications units, she argued. But by August 2001, "the chickens were coming home to roost," she said. Mr. Skilling resigned that month, she insisted, because "Enron as a corporation was financially beat." Instead of letting investors know about the problems, she said the two maintained to investors and employees that the company was financially strong. Soon thereafter, both profited by selling millions of dollars of their own shares. Monday morning, Presiding Judge Sim Lake5 read lengthy jury instructions that included a directive allowing the panel to consider whether the two men deliberately ignored evidence of crimes at Enron. Such a "willful blindness" instruction could make it easier for a jury to convict a defendant even if some panel members aren't convinced he was actively involved in the scheme. Ms. Ruemmler raised the willful-blindness argument against both defendants. For instance, she said when confronted by The Wall Street Journal in the fall of 2001 concerning Enron's controversial dealings with outside partnerships, Mr. Lay turned a blind eye. "Over and over and over again, Mr. Lay chose not to ask hard questions. He did so because he was trying to stick his head in the sand. The law says you cannot do that." Write to Gary McWilliams at gary.mcwilliams@wsj.com24 and John R. Emshwiller at john.emshwiller@wsj.com25 | ||||||
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