What Do You Think of Enron?
Wednesday, November 2, 2005
This week, pale brown envelopes will appear in the mailboxes of 400 Texans, containing a juror questionnaire and marking the beginning of a race for control of the courtroom and public opinion in a trial that defines an era of corporate wrongdoing.
Inside each envelope is a document that could be key to the outcome of the fraud trial of former Enron Corp. leaders Kenneth L. Lay and Jeffrey K. Skilling, who will stand trial in January with former accounting chief Richard A. Causey on charges that they conspired to mislead the public about the financial health of Enron, once ranked as the country's seventh-biggest publicly traded company.
Enron's 2001 collapse was the first in a series of corporate disasters that resulted in record-breaking bankruptcies, pinstriped perp walks and lost investor confidence. It wreaked havoc in Houston and beyond, costing thousands of employees and investors their retirement savings. The Justice Department created a special prosecutorial task force to deal with the fallout after the entire Houston U.S. attorney's office removed itself from the investigation because so many of its lawyers had financial or family ties to the company.
How a Texas jury assesses the evidence against Enron's former leaders will determine its answers to key questions, including just how much executives are expected to know about their company's finances -- and whether the final chapter of an era of financial scandals will close with a bang or a whimper.
Jury selection is a key step for both sides as they try to bend the process in their favor. "Attitudes toward what jurors regard as corporate greed have an impact on the way they hear evidence," said George Washington University law professor and former prosecutor Stephen A. Saltzburg.
Defense lawyers already have gained one advantage by putting more than four years between the bankruptcy and the trial, scheduled to begin with jury selection Jan. 17. But public opinion suggests that the memory of corporate scandals has not faded. Almost half of respondents to a Pew Research Center poll last month said they felt unfavorably toward U.S. companies -- a 20-point rise from March 2001, nine months before Enron filed for bankruptcy protection.
Defense lawyers have sought to ask potential jurors as many open-ended questions as possible in an effort to sniff out hidden prejudice against their clients. For example, a sample questionnaire distributed to 50 Houston area residents by the defense to test out questions asked, "What comes to your mind when you think of" each defendant and elicited responses describing Lay as a "liar, cheat, wealthy individual who will most likely get off."
Prosecutors argued that potential jurors should answer fewer, more targeted questions describing whether they could be fair to the defendants -- in essence, offering less opportunity for respondents to offer stream-of-consciousness, negative impressions. Legal experts say having more information about jurors typically benefits the defense.
U.S District Judge Simeon T. Lake III generally ruled in favor of broader questions, splitting the difference on a few contested items such as whether the jury will be asked, "Would you have difficulty fairly and impartially deciding this case?" (defense) or, "Can you still fairly and impartially decide this case?" (prosecution).
Residents of 13 Texas counties who receive notices this week must sift through more than six dozen questions about their job histories, stock holdings and connections to law enforcement. The mailing will go to residents selected at random from a pool of eligible jurors. Most of the 400 will be culled for reasons including bias or because they would suffer financial hardship if selected to serve on the jury for as long as six months.
By mid-January, 100 to 150 jurors who remain in the pool will be called to a Houston courtroom to face more extensive inquiries, said David Bradley, chief deputy clerk for the U.S. District Court in Houston.
Defense lawyers for Skilling, who has set aside more than $20 million for his legal costs, will be mining for evidence that jurors already are gunning for the defendants. Earlier this year, the lawyers wrote that in an example of "unprecedented activism," several area residents misread an article in the local newspaper and called the clerk's office to volunteer to serve as jurors in the fraud trial of executives at Enron's Internet unit.