Lawyers Take Aim at Enron Witnesses
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Tuesday, January 10, 2006
The fraud trial of former Enron Corp. leaders is three weeks away. But the mudslinging has already begun.
Defense lawyers for onetime chief executives Jeffrey K. Skilling and Kenneth L. Lay yesterday signaled in court papers that they will try to discredit government witnesses by seeking to inquire about their mental health and their use of pornography, prostitutes and drugs.
One unnamed witness, described by a source familiar with the case as former finance chief Andrew S. Fastow, had "pornography habits, which were so extensive that when his computer files were seized they were submitted to the FBI for criminal investigation," defense lawyers claimed in court filings.
Fastow pleaded guilty to taking part in accounting fraud in exchange for a 10-year prison sentence. He is expected to be one of Skilling and Lay's central accusers. Both men maintain their innocence and blame Fastow for carrying out illegal schemes.
Trying to smear witnesses or make them unlikable to a jury is nothing new in white-collar fraud trials. Lawyers for HealthSouth Corp. founder Richard M. Scrushy, former WorldCom Inc. chief executive Bernard J. Ebbers and former stockbroker Peter E. Bacanovic all skewered former colleagues with embarrassing revelations about their personal lives.
Ebbers, Bacanovic and his star client, Martha Stewart, were convicted. Scrushy was acquitted of three dozen charges last year.
The Justice Department's Enron Task Force declined to comment on the latest court filings. A Houston-based lawyer for Fastow declined to comment as well. Prosecutors had previously sought to bar the defense from introducing such evidence, according to court papers.
The arguments came in a far broader court filing in which both sides sought to bar their opponents from introducing evidence that could inflame the jury.
Prosecutors yesterday renewed their bid to tie Skilling and Lay to deals, nicknamed "Deathstar," "Fatboy" and "Ricochet," that led to severe blackouts and steep energy prices in California in 2000 and 2001. The government wants to play audiotapes in which traders discuss "stealing" from consumers.
U.S. District Judge Simeon T. Lake III has yet to rule on the motions. The trial is set to begin in Houston on Jan. 30.
