The Fall of Enron; Lawyers to Testify on Task Force
By Mary Flood, Houston Chronicle
Nov. 19–Two local lawyers will be called to testify along with their former Enron employee clients about whether the Enron Task Force intimidated them, a federal judge ordered Friday.
U.S. District Judge Sim Lake is considering a defense request that he get reluctant witnesses to help former Enron executives Ken Lay, Jeff Skilling and Rick Causey defend themselves. The trio faces a much-anticipated fraud and conspiracy trial in mid-January.
Lake also revealed on Friday that he is considering a gag order to keep the lawyers from making comments to the press, possibly imposing it as soon as the end of December. The judge asked the lawyers to review the suggested gag order. However, it seemed clear he was not going to stop Lay, Enron’s former chairman, from giving his planned Houston Forum speech in mid-December.
Lake also said he will consider keeping secret the government’s list of 89 potential witnesses. Prosecutors asked that it be kept from public view.
In the witness intimidation matter, Lake ordered that attorneys Bob Sussman and Wendall Odom and four of their former Enron executive clients, including Larry Lawyer, who pleaded guilty to a tax charge, be called to testify in a hearing in the next few weeks. The judge wants to determine whether the prosecutorial team scared these witnesses into refusing to aid the defense.
This is part of a series of court sessions about a September defense motion in which the defendants asked the case be dismissed due to prosecutorial misconduct.
Prosecutors not only denied any wrongdoing, they fired back that the defense lawyers misquoted their legal colleagues trying to create a false impression of government conduct.
Lawyers watching the case do not expect the judge to dismiss any charges.
What’s in question is whether the judge will order the government to aid the defense by giving them testimony from people who may not be called at trial. The judge is also considering defense requests to make the government grant immunity to witnesses so they’ll help the defense or be deposed.
Daniel Petrocelli, lawyer for former CEO Skilling, told the judge that Sussman’s and Odom’s clients and others had been intimidated by members of the prosecutorial team.
“It can’t be that no one wants to meet with us,” said Petrocelli, who added that only five of more than 100 possible witnesses have agreed to speak to the defense team.
Reid Weingarten, lawyer for former chief accountant Causey, argued that the defense has not had access to “scores of professionals” who worked on the financial deals in question and who likely believe they committed no crimes. He asked that the defense receive any grand jury testimony, FBI interview summaries and Securities and Exchange Commission testimony from these company accountants and lawyers.
Enron Task Force Director Sean Berkowitz said the government has the facts and law on its side and the defendants are being disingenuous.
He said the defense skipped a recent civil case deposition of one witness they claimed was key. And Berkowitz said there are “plenty of people who will not meet with us.”
Lake dismissed most of the defense allegations, saying they did not contain evidence that convinced him there was prosecutorial misconduct.
But the judge said he wants to hear from Sussman and Odom and their clients to see if the government actually caused them to fear helping the defense.
‘THE BOOKS WERE NOT COOKED’: Former Enron executives Ken Lay, Jeff Skilling and Rick Causey gave a peak into their defense in a letter they sent to a court this month.
Through their lawyers, the trio asked the 5th U.S. Circuit Court of
Appeals to delete a reference to Enron and WorldCom in a recent opinion
reversing the long sentence of midlevel Dynegy executive Jamie Olis.
The trio objected to the appellate court’s statement that any Enron
books were ”cooked,” that fraud propped up Enron stock and rendered the
company worthless.
In a clear precursor of the trial defense likely to be given by Lay,
Skilling and Causey in January, their lawyers state in the letter to the
court: ”It is the defendants’ position, and they believe the evidence
will show at their soon-to-begin criminal trial, that the books were not
cooked at Enron, that its stock was not inflated through fraudulent
means, and that the company’s collapse was not caused by the alleged
fraud.”
Causey lawyer Reid Weingarten also represents former WorldCom CEO
Bernard Ebbers, who is appealing his conviction. The letter complains
the court’s characterization appears to have prejudged an issue in
Ebbers’ appeal as well.
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