Defense: Gov't manufactured Enron case

The government bore down on Enron Corp. as it would the Mafia, intimidating top lieutenants into pointing fingers at their bosses because someone had to pay for crimes that preceded the company's stunning collapse, the lawyer for former Chief Executive Jeffrey Skilling said Tuesday.

"This was all manufactured after the fact," Daniel Petrocelli declared in an impassioned plea for jurors to acquit his client of all 28 fraud and conspiracy counts against him. "Because it's Enron. After all, somebody has to pay. It's Enron."

In a searing closing argument, Petrocelli sought to drive home the defense theme that neither Skilling nor Enron founder Kenneth Lay perpetuated an overarching fraud at the company because none existed.

But prosecutors, unable to dig up tangible proof, found mouthpieces in a string of ex-Enron executives "robbed of their free will," who pleaded guilty to crimes they didn't commit, Petrocelli said. He said fear of lengthy prison terms and expensive legal battles drove those witnesses to say whatever the government wanted them to in testimony against Lay and Skilling.
"That's how they take down Mob kingpins," Petrocelli said.

Lay lawyer Bruce Collins, the first of several attorneys on his legal team to address jurors, said his client has accepted "full responsibility" for Enron's failure -- but Lay committed no crimes.

Collins said another judge presiding over numerous Enron-related lawsuits in another courtroom will decide whether Lay is liable for losses suffered by investors after the company sought bankruptcy protection in December 2001.

The current jury's job is to decide if he is guilty of the crimes alleged by the government.

"Today you decide if Ken Lay is locked in a cage for the rest of his life. Today you decide if Ken Lay is a criminal. Today you decide if Ken Lay committed any crimes," he said.

Tuesday's lengthy closing arguments were the last opportunities for the defendants' lawyers to address the eight-woman, four-man panel. Prosecutors who made their closing arguments on Monday get one more chance in a rebuttal argument on Wednesday. Then, jurors will begin deliberations in the case that began Jan. 30.

The trial is the premier case to emerge from the government's 4 1/2 year investigation into Enron's collapse in one of the biggest corporate scandals in U.S. history. More than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs were lost by the time the energy trading company started bankruptcy proceedings.

The government alleges Lay and Skilling repeatedly lied to investors and employees, touting Enron's financial health when they knew accounting trickery hid failing ventures.

Speaking softly, Petrocelli started by telling jurors that he has "had Jeff's life in my hands" for two years since the ex-CEO was indicted. On Wednesday, "his fate's in your hands."

"Look into his eyes. Look into his soul. See if you see a criminal. See if you see a man with criminal intent," Petrocelli said.

Jurors listened intently, but most didn't laugh when Petrocelli made lighter comments. A female juror repeatedly looked at Skilling's three children -- a daughter and two sons aged 22, 19 and 15. The daughter, seated near her mother and Skilling's first wife, Sue Lowe, at times sniffled and dabbed tears.

Petrocelli conceded on Tuesday that Skilling, during his six-month tenure as Enron CEO in 2001, made many mistakes, and said Skilling was far better at building the company in the years before that than he was at running it. But mistakes are not crimes, the lawyer said.

But Petrocelli's closing argument mostly attacked the way the government handled the Enron case. He turned a prosecutor's suggestion that the case was about "lies and choices" back onto the government itself.

Petrocelli accused federal prosecutors bent on winning convictions of criminalizing innocent comments, honest mistakes and normal business practices.

"They had their eye on the prize. The prize was Jeff Skilling and Ken Lay, and that's why we're here," Petrocelli said. "Documents don't lie. People do. So you create evidence."

Petrocelli also beseeched jurors not to broker any deals during deliberations, such as finding Skilling guilty of some counts and acquitting him of others. All other allegations of fraud, insider trading and making false statements to auditors stem from the single conspiracy count, and it's all or nothing, the attorney said.

"Do you have any hesitation at all about him? If you do, you must acquit him. Don't negotiate with his life. Not guilty, not guilty, not guilty -- 28 times," Petrocelli urged.

Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors related to his activities from 1999 to August 2001. Lay faces six counts of fraud and conspiracy stemming mostly from the period after he resumed as CEO upon Skilling's departure.

On Thursday, Lay will be on trial again -- before U.S. District Judge Sim Lake, but without a jury -- in a case related to his personal banking. In that case, the government contends he obtained $75 million in loans from three banks from 1999 through 2001 and reneged on agreements not to use the money to carry or buy margin stock. He is charged with one count of bank fraud and three counts of making false statements to banks in the case.

Lake plans to issue his verdict in the banking case, which is expected to last several days, after jurors in the larger conspiracy case render theirs.