Skilling Lawyer Could Be Key for Lay, Too

That appears to contradict testimony by former investor relations head Koenig and supports a key defense argument: that company insiders did not believe they were breaking the law at the time, only coming to view their activity in that light under pressure from federal investigations. The conspiracy counts against Lay and Skilling are based on the notion that they were in league with 16 other Enron executives who have acknowledged that what they did was wrong. So defense lawyers are attacking the credibility of those pleas.

Each defendant will be allowed to call up to five character witnesses, a limit U.S. District Judge Simeon T. Lake III said is designed to avoid jurors listening to the "whole panoply of Houston society." Lay had hoped to call the owner of the Houston Astros baseball team, a pioneering heart surgeon, a former Commerce Department secretary and several religious leaders. Expert witnesses also will testify on the defendants' behalf. In part because he is backed by a vast team of partners, associates, paralegals and researchers from his 1,000-lawyer firm, O'Melveny & Myers LLP, and more than $23 million in fees from his client, Petrocelli and his team have taken the lead for the defense.

Ramsey, the lead lawyer for Lay, has somewhat fewer resources at his disposal, relying on a team composed of Dallas securities lawyer Bruce W. Collins, prominent Houston appeals court specialist George "Mac" Secrest and former local prosecutor Chip B. Lewis. In his four-decade career, Ramsey, a folksy litigator who bonds with local juries, has pulled out a series of victories, including a 2003 acquittal of real estate heir Robert Durst. Durst was accused of killing his neighbor, dismembering the body and throwing it into the Gulf of Mexico.

On Lay's behalf, Ramsey has pursued a bold, all-or-nothing strategy, arguing that Lay should not be held criminally responsible for the failure of his business nor the optimistic statements he made in an effort to save it. In essence, the defense suggests that focusing on the positive to calm employees and the markets is common practice, even a duty, of corporate leaders. "Do you want a Chicken Little at the helm of a company like Enron, every time it rains a little bit, saying, 'Oh, my God. The sky is falling?' " Ramsey asked in opening statements. "You want somebody with a steady hand on the helm, with guts enough to stay steady in the midst of a storm."

Ramsey revealed Tuesday that he had had heart problems since at least the third week of the trial and that he had a stent put in one of his arteries last week. He had questioned fewer than a half-dozen of the 22 government witnesses before the surgery.

As a result, the bonds between the Skilling and Lay defense teams grew stronger, as Petrocelli handled the heavy lifting, including most of last week's cross-examination of former treasurer Ben F. Glisan Jr., even though Glisan provided more testimony about Lay than Skilling.

Petrocelli acknowledged the point, noting that he was asking about a key internal meeting more than two weeks after Skilling resigned and Lay took over. The defense lawyer said he hoped he was not encroaching on his co-counsel's turf. But the Lay team didn't object. "That's okay," Lay mouthed to his daughter, Elizabeth Vittor, a lawyer who is part of his defense team and who typically sits between Lay and Skilling at the defense table.

Perhaps most important, Petrocelli has won the confidence of Lake, who told the defense lawyer last month that "you're making a pretty good showing for yourself" in his first attempt at criminal defense.

Until the eight-woman, four-man jury renders its verdict, it is difficult to know how jurors are evaluating the lawyers. Petrocelli's personal style is more Century City than Old West, despite the black alligator cowboy boots he has taken to wearing. In an episode known as "cologne-gate" among trial participants, a female juror took the unusual step of sending a note to the judge last month saying she was overwhelmed by the lawyer's cologne. During a court break, Petrocelli washed off the cologne and has not worn it since.

Outside the courthouse Tuesday, after prosecutors rested their case, Petrocelli jokingly hinted at his desire to return to his roots. "Five or six weeks from now, hopefully we can get through with this, Mr. Skilling can get on with the rest of his life, and I can take off these cowboy boots," he said.