Lay's Aggression on Stand May Hurt Him

In this artist rendering, prosecution attorney John Hueston, left, cross examines Enron founder Kenneth Lay in his fraud and conspiracy trial, Thursday, April 27, 2006, in Houston. (AP Photo/Pat Lopez) (Pat Lopez - AP)

HOUSTON -- Enron Corp. founder Kenneth Lay was expected to charm jurors the same way he spent decades charming politicians, analysts, investors and employees.

But when he took the witness stand this week in his fraud and conspiracy trial, the ever-smiling diplomat and philanthropist morphed into a scrappy fighter.

First he tried to take control of questioning by his own lawyer. Then he repeatedly bristled, snarled and quarreled on cross-examination with the federal prosecutor who had secured the indictment against him.

His transformation was in stark contrast to that of his co-defendant, former Enron Chief Executive Jeffrey Skilling, whose lengthy testimony preceded his own.

Rather than erupt like a volcano, Skilling simmered. But Lay's unexpected aggression and the government's portrayal of him as an arrogant elitist who treated his company like his personal bank could damage some or all of whatever good will he may have had with jurors, experts said.

"Skilling did better than everybody thought he was going to do, and I don't think Lay has done himself any favors," said Gary Brown, a securities lawyer who was special counsel for the Senate Committee on Governmental Affairs during its 2002 investigation of Enron's 2001 collapse into bankruptcy proceedings.

Conventional wisdom said Lay, whose testimony will continue Monday, entered the three-month trial with the better chance of acquittal than Skilling. He faces six narrowly focused criminal counts to Skilling's 28.

Skilling's charges of fraud, conspiracy, insider trading and lying to auditors focus on his actions from 1999 through his abrupt resignation in mid-August 2001. Lay's charges focus primarily on his actions after Skilling's departure and until the company sought bankruptcy protection in December of that year.

However, the overarching conspiracy count alleges both participated in a sprawling effort to portray Enron publicly as healthy when, the government contends, they knew accounting tricks were in play.

Skilling's lawyer led him through his testimony in a dance they swear wasn't choreographed. Lay quickly established that he was in charge during his own testimony.

"I'm not done yet, Mr. Secrest. I told you this is not simple," Lay told his lawyer, George Secrest, when the attorney tried to interrupt the ex-CEO's meandering description of what he says killed Enron: a lethal combination of bad press, colluding short-sellers in a bear market and a greedy, thieving chief financial officer.

"This is looking like a textbook case of the dangers of putting defendants on the stand," said Sam Buell, a former member of the Justice Department's Enron Task Force who now teaches at the University of Texas School of Law.