Enron Trial: Week in Review

The seventh week of the fraud and conspiracy trial of Ken Lay and Jeff Skilling resumes this morning. The government's case is in its final weeks and may be concluded by the end of the month. Houston Public Radio's Rod Rice reviews the sixth week of the trial with Houston attorney and former federal prosecutor Chris Bebel.

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The most notable witness may not have been an Enron insider, but rather downstream employee Johnnie Nelson, who works at a pipeline field station in New Mexico. He was heavily invested in Enron stock and says when the company went under he lost everything. His "everyman" answers were short and direct and the counterpoint to longer, detailed more accountant type answers of witnesses that preceded him. Chris Bebel says Nelson showed the jury this trial is not a purely academic exercise.

"That testimony by Mr. Nelson was gripping testimony that was directed more at the hearts of the jurors than the minds of the jurors. It brought the case to a whole new level and added an entirely new dimension. It will cause the jurors to develop passionate feelings, at least from the government's perspective, and not view this in such a neutral, detached and objective manner."

Nelson was also hard to discredit on cross-examination, says Bebel, because he has no real baggage, he's been devastated by and made a victim of the collapse of Enron.

"When that type of witness is questioned and pressured he can just get stronger and he can end-up harming the defendant's case even more."

The high profile witness of the week was former Enron Vice President Sherron Watkins. It was Watkins who wrote the August 15th, 2001 memo to Ken Lay that said the company was imploding in a wave of accounting scandals. She subsequently met with Lay to personally to make the same claims. Lay subsequently told investors that the company was sound and the future was bright. She also presented a more negative image of Lay.

"She brought out the fact that in the wake of her August 22nd meeting with Ken Lay, Ken Lay began taking steps to have her fired. That's puts Ken Lay in another light, it makes him appear to the jurors as an evil, nasty man."

Bebel also thinks Watkins easily deflected allegations by the defense that she engaged in insider trading when she sold off Enron stock.

With the government expected to wrap up its part of the trial by the end of the month Richard Causey's name has not appeared on the government's witness list. He was expected to be a defendant with Lay and Skilling until agreeing to a guilty plea late last year, and at the time it was assumed he's testify for the prosecution. Bebel says in a complicated, detailed nuanced case prosecutors may meet with a witness for a hundred hours or more to make sure everyone is on the same page and there was simply not enough time to do that with Causey. But, he says Causey may still play a role.

"Look for him to play a role in the case during the course of rebuttal, if necessary."

Bio photo of Rod Rice

Rod Rice

Local Anchor, Morning Edition

Rod Rice became fascinated with radio at an early age, while sitting on his Grandfather’s lap listening to his "programs" on the big Emerson Radio...