Ex-Enron bosses for trial

HOUSTON – Enron Corp.’s former top bosses Ken Lay and Jeffrey Skilling entered a federal courtroom yesterday to face the jury that would judge whether the two took part in the fraud that brought down the company.

The case, finally coming to trial more than four years after what was once the seventh largest US company collapsed into bankruptcy, is expected to last four months as the prosecutors run through accounting issues, analysts presentations and financial arcana to build their case. Lay, 63, who led the company for 15 years before handing over the chief executive position to Skilling, faces seven charges, including conspiracy and fraud.Those charges are linked mostly to the few months he returned to serve as CEO after Skilling resigned and before Enron’s bankruptcy filing.Skilling, 52, faces 31 charges including conspiracy, fraud and insider trading.US District Court Judge Sim Lake has said he expected jury selection to be completed yesterday, and that opening statements would start this morning.Unlike Lay, who is expected to say he knew nothing of any illicit activities at the company, Skilling has indicated he will argue the company did nothing illegal, and that it collapsed due to a run on its bank accounts by nervous creditors.Enron was praised as an energy market innovator before it imploded in 2001 when its illicit use of off-balance-sheet partnerships to hide billions of dollars in debt and pump up earnings was unveiled.After that, it and its ‘crooked E’ logo became a symbol of corporate malfeasance that would soon be joined by scandals at other blue-chip companies such as HealthSouth, WorldCom, Global Crossing and Adelphia.The energy trader’s demise left thousands jobless and wiped out billions of dollars in workers’ retirement accounts – a factor that defence lawyers complained has created a tainted jury pool made up mostly of people who are already biased against Lay and Skilling.So far, sixteen people have struck plea deals with the US Department of Justice’s Enron Task Force for activities at the company, and five others, including four former Merrill Lynch employees, have been found guilty at trial.But one Enron accountant has been acquitted, and five other executives at its Internet unit emerged unscathed from a trial last year, although they will again face juries this year.Arthur Andersen, the accountancy firm that audited Enron’s books and whose tattered reputation ruined its business, had its conviction for destroying documents overturned by the Supreme Court last year, and prosecutors subsequently dropped the case.-Nampa-ReutersLay, 63, who led the company for 15 years before handing over the chief executive position to Skilling, faces seven charges, including conspiracy and fraud.Those charges are linked mostly to the few months he returned to serve as CEO after Skilling resigned and before Enron’s bankruptcy filing.Skilling, 52, faces 31 charges including conspiracy, fraud and insider trading.US District Court Judge Sim Lake has said he expected jury selection to be completed yesterday, and that opening statements would start this morning.Unlike Lay, who is expected to say he knew nothing of any illicit activities at the company, Skilling has indicated he will argue the company did nothing illegal, and that it collapsed due to a run on its bank accounts by nervous creditors.Enron was praised as an energy market innovator before it imploded in 2001 when its illicit use of off-balance-sheet partnerships to hide billions of dollars in debt and pump up earnings was unveiled.After that, it and its ‘crooked E’ logo became a symbol of corporate malfeasance that would soon be joined by scandals at other blue-chip companies such as HealthSouth, WorldCom, Global Crossing and Adelphia.The energy trader’s demise left thousands jobless and wiped out billions of dollars in workers’ retirement accounts – a factor that defence lawyers complained has created a tainted jury pool made up mostly of people who are already biased against Lay and Skilling.So far, sixteen people have struck plea deals with the US Department of Justice’s Enron Task Force for activities at the company, and five others, including four former Merrill Lynch employees, have been found guilty at trial.But one Enron accountant has been acquitted, and five other executives at its Internet unit emerged unscathed from a trial last year, although they will again face juries this year.Arthur Andersen, the accountancy firm that audited Enron’s books and whose tattered reputation ruined its business, had its conviction for destroying documents overturned by the Supreme Court last year, and prosecutors subsequently dropped the case.-Nampa-Reuters