Enron jury must tackle complex testimony

Ken Lay and Jeffrey Skilling face trial on counts of fraud and false statements.

Aidan M. Anderson

The name is recognizable to most for reasons they might not know. It’s been the punch line of a thousand jokes, a subject of several movies and even set the stage for an August 2002 Playboy spread of former employees.

And more than four years after declaring the largest corporate bankruptcy in U.S. history, the trial of Enron’s two former chief executives, Ken Lay and Jeffrey Skilling, is in full swing.

While the name Enron is familiar to many ” even Microsoft’s spell-checker will flag the word if you fail to capitalize it ” the charges and their impact on business are not.

Skilling, the company’s most recent CEO, was indicted on 31 counts, including insider trading, securities fraud, wire fraud and making false statements.

Lay, a former CEO and chairman of the company, faces seven counts, including conspiracy to commit wire and securities fraud and making false statements.

Their indictment alone is 68 pages.

“This case is mind-blowingly complex,” said Savannah Guthrie, an attorney and correspondent for Court TV, based in New York City.

“The prosecutors not only have to convince the jurors of the defendants’ guilt, in some ways they have to educate the jurors of these accounting procedures,” she said. “I think this is one of those cases that people will pay attention to at the beginning and certainly be interested in at the end.”

Faced with arguing issues to a jury of laypeople that some can’t grasp likely will lead to prosecutors using simple overarching themes, Guthrie said.

“It’s high finance, it’s structured finance; some parts will be easy for anyone to understand, like saying the company is strong when it’s actually weak,” Guthrie said.

Public interest in the case will be impacted by the nature of the argument; the evidence is very technical, involving sophisticated business transactions, she said.

“You’ll have a corps of reporters there every day covering the developments, but I don’t think it will be like an O.J. (Simpson) trial where people will be talking about it at the water cooler,” Guthrie said.

Cameras have been barred from the courtroom, so there will be no in-court coverage of the litigation.

“I think the sheer technicality and complexity of the transactions… are going to mean that the public won’t get as excited about that than, say, a murder case,” said Gregg Polsky, an associate professor at the University’s Law School.

“Before the verdict, I wouldn’t expect there to be much public interest,” said Polsky, who taught a seminar on Enron last semester.

Those most likely to tune in for the details of the “Super Bowl of Corporate Fraud” are analysts, mutual fund managers and high-ranking business executives, said Karen Schnatterly, a Carlson School of Management professor.

“These are people we see ending up in court more and more often,” she said.

Many will watch what happens to Skilling and Lay because Enron has become the “poster child of corporate crime in this era,” Schnatterly said.

“A lot of people who got caught up in this didn’t start out attempting to lie to people, they just got pressured into it, and that could happen to anybody, to anybody in business today,” she said.