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Prosecutor: Enron Trial About 'Lies And Choices'

Trial Could Last Up To Four Months

POSTED: 9:12 am MST January 31, 2006
UPDATED: 1:17 pm MST January 31, 2006

A federal prosecutor kicked off opening statements in the Enron fraud trial in Houston on Tuesday by telling jurors the case is about lies, not numbers.

Prosecutor John Hueston said it's a simple case. He said, "It is not about accounting. It is about lies and choices."

He told jurors that former Enron chiefs Kenneth Lay and Jeffrey Skilling assured investors that all was well despite crushing debt and chaotic finances.

Lay and Skilling contend that Enron's success was genuine and that they committed no crimes.

In his opening statement, the lawyer for Skilling said his client never spearheaded, took part in, or knew of a massive conspiracy.

Daniel Petrocelli told jurors "This is not a case of hear no evil and see no evil. This is a case of there was no evil."

He attributed Enron's collapse to a cash crisis of "chaos, not insolvency."

In the three years before Enron crashed, Skilling was paid over $150 million and Lay was paid more than $220 million.

Opening statements were expected to last through Tuesday, followed by testimony Wednesday.

Lay and Skilling face dozens of counts of fraud, conspiracy and other charges tied to the energy company's spectacular crash in 2001.

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

The judge told prospective jurors that "this will be one of the most interesting and important cases ever tried." He said it could last up to four months.

But, he said jurors shouldn't include "people who want to right a wrong or provide remedies for those who suffered in the collapse of Enron."

The first prosecution witness was expected to be Mark Koenig, former head of Enron's investor relations department. Koenig worked with Lay and Skilling on quarterly conference calls with analysts. He pleaded guilty nearly two years ago to aiding and abetting securities fraud.

Thousands of people were laid off when Enron flamed out. But the judge has made it clear the jury box is not the place to avenge those who lost jobs or investments.

The jury that will decide the fate of the two former Enron executives is predominately female.

There are eight women and four men on the panel, plus two male and two female alternates. Little is known about them because their juror questionnaires were not released.

Both Kenneth Lay and the lawyer for Jeffrey Skilling said they were pleased with the jury.

The judge said he didn't expect jurors to "blot out" what they had seen and read about Enron, but he urged them to decide based only on the evidence.

Enron was once the nation's seventh-largest company.

Before 2001, it was considered an innovative new-economy maverick and admired as a top stock performer. But a spectacular collapse left thousands jobless and slammed Wall Street with billions in losses.

A former Enron pipeline worker who lost his job in the 2001 collapse said the trial "is what we've been waiting for."

Among the former employees who lost their retirement savings is Charles Prestwood. His nest egg contained $1.3 million, the sum total of working for Enron and its predecessor for 33 years. After the implosion, Prestwood's retirement savings fell to $3,600.

Prestwood said he is convinced that both Lay and Skilling knew everything that was going wrong.

"A lot of people said, 'Well, maybe they didn't know anything about it.' I said, 'You'll never convince me of that because the boss hog knows all of its piglets,'" Prestwood told KPRC-TV in Houston.

Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly lying about Enron's financial strength.

Lay faces seven counts of fraud and conspiracy for perpetuating the alleged scheme after Skilling resigned in August 2001.

Both men have pleaded not guilty.

If convicted, each could face decades in prison and millions of dollars in penalties.


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