- The Washington Times - Tuesday, March 28, 2006

HOUSTON (AP) — A federal judge yesterday dropped three of the 31 counts against former Enron Chief Executive Officer Jeffrey Skilling and one of the seven counts against company founder Kenneth L. Lay.

As the prosecution rested its case, U.S. District Judge Sim Lake dropped two counts of securities fraud and one count of lying to auditors against Mr. Skilling, leaving 28 criminal counts against him; the judge also dropped one securities fraud count against Mr. Lay, a government prosecutor said.

All the dropped counts against Mr. Skilling pertain to crimes that reputedly occurred in the first quarter of 2000. Prosecutors didn’t present evidence dealing with that time span. The dropped count against Mr. Lay pertains to a November 2001 conference call.

None of the counts can be refiled, the prosecutor said.

is expected to feature testimony from both defendants. Defense lawyers have pared down their witness list to about 100 from more than twice that, though one-fourth or more of the remaining witnesses are likely to testify.

The government presented 22 witnesses since testimony began Feb. 1, which included eight former executives who have pleaded guilty to crimes, one with an immunity deal, one who settled regulatory charges and three who said they voiced concerns about financial peril that fell on deaf ears.

As the government wound down its case, it left jurors with an image of the large salaries Mr. Lay and Mr. Skilling accepted — almost $375 million between them — as the company slid toward bankruptcy proceedings.

Mr. Skilling earned more than $151.7 million from Enron Corp. from 1999 to 2001, the year he resigned and the company collapsed. He also sold stock for more than $41 million.

In the same three years, Mr. Lay earned more than $222.8 million from the company.

The indictment spans 1999 through 2001.

The government sought to bolster its charges through the memories of witnesses, audiotapes of conference calls with Wall Street analysts and videotapes of employee meetings.

Prosecutors say Mr. Lay and Mr. Skilling repeatedly lied about Enron’s financial health, spouting optimism about the strength of the company and its various ventures while they reputedly knew accounting maneuvers propped up an image of success.

The two men contend there was no fraud at Enron other than that by a few employees who skimmed money for themselves from secret scams, including former Chief Financial Officer Andrew Fastow. They insist they did nothing wrong, and attribute Enron’s failure to negative publicity coupled with a loss of market confidence.

The government took a brick-by-brick approach in presenting its case, but lacked tangible proof such as e-mail, documents or notes. Neither Mr. Lay nor Mr. Skilling was known to use e-mail at Enron.

Prosecutors instead relied on witnesses — some of whom had pleaded guilty to related crimes — to explain that the optimism Mr. Lay and Mr. Skilling expressed to analysts, employees and investors through conference calls, meetings and media interviews hid Enron’s true financial state.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide