Enron trial

The Enron trial is facinating. I mean I don't follow it closely, what I find interesting is the defense. Will it work? I have no idea. The prosecution has rested.

The Houston Chronicle has a trial blog that seems to cover it well.

Here is a preview of what the defense might say from their first posts during the opening statements:

Daniel Petrocelli promised the jury that Jeff Skilling will testify. "You could not keep him of the witness stand," he said beginning his opening statement after the government ended its statement this morning.

"This is not a case of hear no evil, see no evil. This is a case of there was no evil," Petrocelli said.

He said Lay and Skilling were obligated to give their trust to the shareholders and they did. He said they were well informed and that they knew the company was sound and successful. But Enron was the victim of an immediate, punishing drain on its liquidity from its trading partners, who drained it of cash.

"He never broke the law. He didn't lie. He didn't cheat. He didn't steal," Petrocelli said. "Mr Skilling did not steal one nickel."

He said it was Andrew Fastow, ex-CFO, and two cohorts who stole. But otherwise, things were healthy at Enron.

"Enron was no house of cards . . . It was a wonderful company, a shining star," Petrocelli said. He said it's a tragedy what happened and the dark shadow of the empty Enron towers loom over the courtroom today.

Responsible, not guilty

''Ken Lay has, does and will continue to accept responsibility for the bankruptcy of Enron. He was the man in control ... But failure is not a crime. Bankruptcy is not a crime. If it were we'd have to turn Oklahoma back into a penal colony because there would be so many people we'd have to lock up,'' Lay's lawyer Mike Ramsey told the jury this afternoon.

He said the story of Enron's tale is a Greek tragedy about the erosion of trust, some of it after ex-CFO Andrew Fastow's thefts were revealed.

Ramsey said Fastow ''stole peanuts, Andy stole crumbs. What Andy stole from Enron was its good name.''

He stressed that his client, while accused of getting wealthy off stock sales while telling others to buy more stock, did not sell stock during the time in question except when he was ''compelled'' to do so.

Ramsey said the indictment against Lay and Skilling is so convoluted, difficult to understand and filled with gobbledygook that ''it makes you think that whoever wrote it has a nervous disorder.''

No motive

After the lunch break, Skilling lawyer Petrocelli continued to attack the indictment against his client.

Taking shots at the government accusations he argued:

* It made no sense that Enron had $1 billion in reserves yet prosecutors are claiming there was a conspiracy to cover losses.

* Andrew Fastow's LJM side company was not some shady structure but approved by the accountants.

* Fastow's side deals had contracts that forbade oral side agreements. He said the prohibition is just like the Enron Task Force has in its contracts with the people who have pleaded guilty in this case.

* A document that said Skilling "preferred" to "beat the street" expectation for stock by 2 cents a share is not damning, it means he was doing his job. Petrocelli said Skilling didn't ask anyone to do anything wrong or illegal.

Petrocelli said there will be no document that will prove his client's guilt.

"What is Jeff Skilling's motive?", asked Petrocelli. The indictment said he committed crimes for money and prestige. "In 1999 he had more money than he ever dreamed of having," Petrocelli said. He said he already had plenty of prestige.

Next up is Ken Lay's lawyer Mike Ramsey.

"Not a greedy man"

Jeff Skilling wanted so much to save a troubled Enron he was planning to put his entire savings of $60 milion to $70 million back into the company, according to his lawyer Daniel Petrocelli. That didn't happen but Petrocelli said it shows his client's commitment to the company.

He described Skilling as an idea man who was uncomfortable running the company. Skilling decision to leave in August 2001 was no great mystery and not sudden, Petrocelli said. Skilling had tried to leave or cut back his hours before, he said.

Skilling was not a part of a conspiracy and did not lead one, Petrocelli said. Skilling is not a greedy man but a man who is passionate about innovative business, like the ones he created at Enron.

Petrocelli noted all the deals in question were vetted by accountants and lawyers. "This place was infested with accountants and lawyers. There used to be a joke that you couldn't go to the bathroom without running into an accountant or a lawyer," Petrocelli said.