Trial to begin for Enron's Lay and Skilling

HOUSTON -- It used to bother Ken Horton that his fellow former Enron Corp. employees weren't as upset as he was about what had happened to them.

 "It almost made me angry that they seemed so laid back," said Horton, 42, a finance wiz who worked in Enron's risk-management operation. Like some 4,000 co-workers, he lost his job and retirement savings when the company collapsed in a financial scandal. 



 "It definitely pushed my retirement back a good five or 10 years," Horton said of his loss of hundreds of thousands of dollars in savings and stock options. 



 Yet Horton has "moved beyond a lot of the initial anger" and today finds himself wanting something he couldn't have imagined wanting a few years ago: a fair trial for his former bosses. 



 Jury selection begins in federal court here Monday morning for the fraud and conspiracy trial of former Enron Chairman Kenneth L. Lay and Chief Executive Jeffrey K. Skilling. Four years have passed since Enron's Dec. 2, 2001, Chapter 11 bankruptcy filing, but now things are moving fast. 



 U.S. District Judge Sim Lake said he expected a jury to be chosen in less than a day, and he told Assistant U.S. Attorney John C. Hueston to be ready to deliver his opening statement first thing Tuesday morning. 



 The Lay-Skilling trial is the capstone of the recent corporate-fraud cases, which followed scandals that darkened such names as WorldCom Inc., Tyco International, Adelphia Communications Corp. and HealthSouth Corp. and have prompted tough new laws to hem in corporate excess. 



 The stakes in the downtown Houston courtroom could scarcely be higher. Lay and Skilling could end their lives in prison if convicted of all charges. And for many people, this single verdict will determine whether the government's sweeping anti-corruption crackdown has been a success. 



 Lay and Skilling are accused of lying to Enron employees and the public as part of a conspiracy to hide the truth about Enron's shaky financial position. Their goal, according to the government, was to prop up the company's stock price and continue profiting on their own vast shareholdings. 



 Daniel M. Petrocelli, Skilling's lead lawyer, and Michael W. Ramsey, Lay's chief lawyer, will argue that there was "a very small pocket of fraud" at Enron, mainly confined to former chief financial officer Andrew S. Fastow, former treasurer Ben Glisan Jr. and Fastow aide Michael Kopper -- all of whom pleaded guilty to felonies and pledged to cooperate with the government. Fastow and Glisan are expected to be prominent prosecution witnesses in a trial that is expected to last four months. 



 Fastow and his accomplices weren't interested in fooling the public or boosting the stock price, Petrocelli said Friday. Their only aim was to secretly steal from the company, he said, but when their dealings were exposed, it started a panic reaction in the markets that ultimately toppled an otherwise-healthy Enron. 



 That's the defense's case, but Petrocelli said it would be hard to convince people whose minds had already been made up. 



 The defendants' legal teams have argued strenuously that they can't get a fair hearing in Enron's hometown. 



 "Unlike anyplace else in this country, the Houston community feels uniquely betrayed and ashamed by the demise of Enron," Petrocelli said in a court motion earlier this month. 



 He also has expressed frustration about the judge's plan to complete jury selection in a day. 



 Skilling himself said Friday that his fate hinged on seating an unbiased jury. 



 "If we get a jury willing to listen to the facts, then yes, I'm very confident we're going to be vindicated," he said. 



 Lake hasn't bought the defense's claim that an impartial jury cannot be seated in his court. He excused from the panel scores of potential jurors whose answers to the pre-trial questionnaire showed bias. That, plus exclusions for hardship, winnowed the pool to about 165 people, of whom 125 have been ordered to show up in court Monday morning. 



 Lake said there should be ample time Monday to probe the remaining candidates for evidence of hidden bias or other disqualifying factors. 



 The responses of Ken Horton and several other former Enron employees interviewed over the last week seemed to support Lake's view. 



 Horton now works for a consulting firm that advises companies on how to comply with Sarbanes-Oxley, the reform law passed in the wake of the Enron scandal. 



 "The Houston mentality is a little bit special," Horton said. "You hit a gusher one day, you go bankrupt the next and you start a new company the day after. It's not too surprising we've moved on."