When the FBI Comes Calling…®
Friday, February 20, 2004
Delay, discredit key to defense;
Skilling will want change in venue
Robert Manor
Defense lawyers say former Enron Corp. Chief Executive Jeffrey Skilling will try to delay his trial, move it as far as possible from Houston and then try to convince jurors the prosecution's star witness, former Enron finance chief Andrew Fastow, is an outrageous liar.
Skilling, who was charged Thursday with 35 counts of fraud, insider trading and other crimes, faces up to 325 years in prison and fines totaling more than $80 million if convicted on all counts. He also faces more than $60 million in fines stemming from a civil suit filed Thursday by the Securities and Exchange Commission.
Attorneys say he faces major obstacles in the case but that there are legal tactics that can give him a better chance of acquittal, or at least a hung jury.
The first is to put off the trial as long as possible. Lawyers say a lengthy delay is probable because the case is complex.
"I don't see this case coming to trial anytime soon," said Neal Sonnett, a former federal prosecutor and former president of the National Association of Criminal Defense Lawyers.
While he awaits trial, some of the attention focused on Skilling will diminish, Sonnett said.
Skilling's lawyers also are likely to ask for a change of venue out of Houston, where thousands of people lost their jobs and life savings when the energy company collapsed.
Negative stories about Enron executives have dominated the news in Texas since the company began to fall apart in the fall of 2001, complicating efforts to impanel an unbiased jury.
"If I were on his defense team, I would want to get this thing moved about as far away from Houston as I can," said Martin Weinstein, a former federal prosecutor.
Next, Weinstein said, Skilling must decide whether he wants to be tried along with former Enron Treasurer Richard Causey, who also was indicted on Thursday. Causey answered to Skilling at Enron and was a much smaller player at the company.
"If you are Causey, you might want to be in the trial, because next to [Skilling] you'll look pretty good," Weinstein said.
The same logic might prompt Skilling to ask to be tried alone, because he might look worse in comparison with Causey.
If the trial stays in Houston, selecting a jury could be an arduous process.
Douglas C. McNabb, a Houston lawyer who specializes in federal white-collar crime, said the typical Houstonian is just as angry about Enron and its top executives now as when the company began to implode.
To counter this, the court must filter out people who cannot set aside their prejudices.
"There will be a jury questionnaire," McNabb said. "I am talking 18, 20 pages or so to assist the lawyers in weeding out potential jurors who cannot be fair."
Unlike most state judges, federal judges typically question prospective jurors. But the questionnaires are drawn up by the prosecution and defense, allowing them to probe deeply into a prospective juror's background and attitudes. Candidates for the jury certainly will be asked if they ever worked for Enron, for example.
"If you are good at what you do, you should be able to ferret out any predisposition" toward one side or the other, said Theresa Zagnoli, the chief executive of Chicago-based Zagnoli, McEvoy, Foley LLC, which offers jury consulting.
Zagnoli said Texas' federal courts are quicker to exclude people with prejudice than most other courts.
"The bar is set very low in exposing and dealing with bias," she said.
Once the trial begins, "it's pretty clear that Skilling is going to blame all the lawyers, all the accountants, who he is going to argue were misleading him," said Gerald Treece, professor of constitutional law at South Texas College of Law in Houston.
Chief among the prosecution's witnesses is Fastow. He made millions of dollars for himself by setting up fraudulent deals that made Enron look as if it were a prosperous concern.
Fastow pleaded guilty last month to federal charges stemming from his schemes at Enron and is to get a 10-year prison sentence. Fastow, the intellectual author of Enron's deceptive accounting, is expected to testify that Skilling approved it.
Skilling's lawyer "is going to argue that Fastow is a rat," Treece said. "He is going to argue that he is a liar."
Fastow and his wife, who was only peripherally involved in the fraud, were given reduced sentences in exchange for Fastow's cooperation.
Treece said Skilling's lawyers are certain to argue that Fastow's testimony is in exchange for prosecutorial leniency.
Treece said Skilling also may say that he didn't understand the deals drawn up by Fastow, and that he thought they were legitimate because lawyers and the Chicago-based Andersen accounting firm gave their approval.
Treece said that defense works sometimes but usually not for financially sophisticated people.
"He has a master's in business from Harvard," Treece said. "It would be one thing if you are a carnival barker."