Enron execs convicted
Published 9:00 pm Thursday, May 25, 2006
HOUSTON – Former Enron executives Kenneth Lay and Jeffrey Skilling were found guilty Thursday on most counts in their landmark conspiracy and fraud case.
In the end, the jury of eight women and four men embraced the testimony of a parade of former Enron executives who said Lay and Skilling lied publicly about the energy company’s financial health and condoned, if not actively encouraged, the use of accounting tricks to boost reported profits and hide debt.
The verdicts, which were reached after the jury deliberated for more than five days, were read aloud in a Houston courtroom.
Lay, 64, the company’s former chairman, and former chief executive Skilling, 52, are scheduled for sentencing on Sept. 11. Lay faces a maximum of 165 years in prison while Skilling faces a maximum of 185 years.
Outside the courtroom, Skilling denied any wrongdoing, and his chief defense attorney, Daniel Petrocelli, vowed to file a “full and vigorous appeal.”
“We fought a good fight,” Skilling told reporters gathered outside the downtown courtroom. “Some things work. Some things don’t.”
One of the jurors interviewed after the trial said that the testimony of former Enron Treasurer Ben Glisan Jr., who is serving a five-year prison sentence for his role in the scandal, played an important part as they weighed the evidence.
“We kept on going back to that testimony to corroborate things,” said juror Freddy Delgado, a school principal. “I believe that he was one of the best witnesses that was brought forward.” The decision of Lay and Skilling to take the stand in their own defense didn’t help their case much, according to another juror.
“I wanted very, very badly to believe what they were saying,” said business owner Wendy Vaughn. But, “there were places in their testimony where I felt their character was questioned.” Lay’s sale of $20 million of Enron stock in 2001 months before the company collapsed also weighed heavily with jurors, with one expressing disgust at the transaction, which would not have to be reported until the following year. It was “a disgrace,” said electrical designer Doug Martin.
The verdicts were perhaps the government’s most important victory in its high-profile war against corporate corruption.
“The jury has spoken, and they have sent an unmistakable message to boardrooms across the country: You can’t lie to shareholders. You can’t put yourselves in front of your employees’ interest,” said Sean Berkowitz, head of the Justice Department’s Enron Task Force, outside the courtroom. “No matter how rich and powerful you are, you have to play by the rules.”
Enron’s implosion was one of the most infamous corporate scandals in U.S. history. The energy company’s failure wiped out more than 5,000 jobs and billions of dollars of stock-market value. It also led to sweeping new regulations and legislation – particularly the 2002 Sarbanes-Oxley law – meant to curb corporate wrongdoing and restore confidence in companies’ financial statements.
Lay and Skilling, who have insisted that they were made scapegoats for Enron’s shocking 2001 collapse, became the headline targets of a massive crackdown on corporate wrongdoing that also resulted in charges against executives of such companies as WorldCom, Adelphia Communications, HealthSouth and Tyco International.
Enron’s auditors, accounting giant Arthur Andersen, went out of business after being indicted for obstruction of justice in the wake of Enron’s collapse. Testimony showed that Andersen employees shredded mounds of Enron-related documents after the federal investigation was launched. The U.S. Supreme Court last July overturned the company’s 2002 conviction because of faulty jury instructions.
The Enron trial lasted 56 days, including one day for jury selection, one day for opening statements and three days for closing arguments. The prosecution team took 30 days to present its case. The defense took 21 days.
