- The Washington Times - Monday, January 30, 2006

HOUSTON (AP) — A jury of 12 Houston-area residents was selected yesterday for the trial of former Enron Corp. chiefs Kenneth L. Lay and Jeffrey Skilling, who are accused of orchestrating a massive fraud that brought down the company.

Ten women and six men were chosen to serve as jurors and alternates in the trial, but it was not clear which 12 would be the jurors.

The jurors were picked after just one day of jury selection in Houston federal court.

A court clerk swore in the 12 jurors and four alternates, and U.S. District Judge Sim Lake instructed them not to talk about the case during their service. He also ordered them not to read, listen to or watch news reports about the trial.

“You have been through a rigorous selection process. You will be the judges of the facts of this case,” Judge Lake said.

Further details about the jurors’ backgrounds were not available because their jury questionnaires, filled out weeks ago, have not been made public, and the judge conducted individual questioning of potential jurors at the bench.

Earlier in the day, the judge had told a pool of almost 100 potential jurors: “I can assure you this will be one of the most interesting and important cases ever tried.”

Opening statements were scheduled today in the trial — one of the most watched cases to emerge from corporate scandals that began when Enron went under in 2001.

Even though thousands of Houston-area residents were laid off in the flameout of the energy giant, the judge made it clear yesterday that the jury box was not the place to avenge those who lost jobs or investments.

“We are not looking for people who want to right a wrong or provide remedies for those who suffered in the collapse of Enron,” Judge Lake said.

Mr. Lay, 63, and Mr. Skilling, 52, appeared relaxed and ready as they arrived at a federal courthouse here, flanked by lawyers and watched by a horde of reporters and photographers, some of whom had camped out overnight to secure places inside.

A reporter asked Mr. Lay how he felt, and he answered, “Fine, how are you?”

Mr. Skilling declined to comment, but his attorney Daniel Petrocelli said, “We’re looking forward to it. We’re ready.”

Judge Lake acknowledged the heavy publicity surrounding the case in the Houston area and said he did not expect jurors to “blot out” what they had seen and read, but urged them to decide based only on the evidence.

The judge also read a long list of potential witnesses in the trial, including Houston Astros owner Drayton McLane Jr. and at least two ministers. Scattered jurors recognized some of the names, but all assured the judge they could hear the case impartially despite their connections.

Judge Lake said he would talk privately later in the day with one woman who recognized the name of one potential witness, identifying her as “my neighbor and friend.”

Jury selection occurred just blocks from the building that was once a nerve center for Enron, a Wall Street darling in the late 1990s that was considered a new-economy maverick with a high-flying stock price and a now-iconic tilted “E” logo.

But the company’s fortunes — not to mention tens of thousands of jobs and billions of dollars in investments — were shattered in 2001, when a series of complex entities designed to hide Enron debt came to light and the company went bankrupt.

“This is what we’ve been waiting for,” said David Tonsall, a former Enron pipeline worker who was one of thousands laid off when Enron crumbled in December 2001, and who watched Mr. Lay and Mr. Skilling walk into court yesterday.

A federal indictment accuses Mr. Lay and Mr. Skilling of orchestrating a complex scheme of accounting tricks designed to hide the debt, keep Enron’s credit rating high and maintain a healthy stock price, while enriching themselves in the process.

Mr. Skilling faces 31 counts of fraud, conspiracy, insider trading and deceiving auditors about Enron’s financial strength. Mr. Lay, who faces seven counts of fraud and conspiracy, is accused of perpetuating the scheme after Mr. Skilling resigned in August 2001.

Judge Lake told the jury pool that the trial could take as long as four months. Among the expected witnesses is Andrew Fastow, Enron’s former chief financial officer. He pleaded guilty to conspiracy charges in 2004 and faces up to 10 years in prison when he is finished cooperating with federal prosecutors. Fifteen other former Enron executives have pleaded guilty in the accounting scandal.

Enron’s crash and the subsequent scandals roiled Wall Street, sent investors fleeing, prompted stiffened white-collar penalties and raised regulatory scrutiny over publicly traded companies that spawned a slew of high-profile cases.

The Enron collapse led off a series of corporate scandals, and in the ensuing years, the government has won convictions against Martha Stewart and executives from companies such as WorldCom Inc. and Adelphia Communications Corp. A rare exception was HealthSouth Corp. founder Richard Scrushy, who was acquitted on fraud charges last year, even after five former finance chiefs implicated him in an earnings-boosting scheme.

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