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)

"It was widely agreed that the government had a stronger case against Skilling than Lay, there was less explaining for Lay to do, and more questions about his link to the fraud," Buell said.

But when challenged by prosecutor John Hueston about his veracity, possible witness tampering and failure to publicly disclose sales of $70 million in Enron stock back to the company even as it was failing, Lay was often dismissive, answering questions in a tone that suggested they shouldn't have been posed in the first place.

Buell said a bad performance on the witness stand is no guarantee of conviction. Even jurors who roll their eyes or otherwise show some degree of exasperation base verdicts on whether the government has proven crimes were committed, he said.

But Lay could have more worries now than before he began testifying.

He acknowledged calling two potential defense witnesses during the trial to see if their recollection of a meeting matched his. Lay also admitted trying to get in touch with a government witness just nine days before he testified.

Buell called Lay's actions "unseemly and a bit shocking," and said they defy some of the most common edicts defense attorneys give their clients: Don't talk to anyone involved in the case.

"It can only hurt the defendant. Even if it's something that's not done with bad intent, it looks bad," Buell said. "Lay either didn't get that advice, or he got it and he ignored it."

Brown said those actions could convey to jurors that Lay believes he can take matters into his own hands rather than let them decide the case.

"Ken Lay is what I would call a fix-it man who thinks he can pick up the phone and take care of it because of who he is, a man of power," Brown said. "It's as though he thinks he can call anyone, any time. They're not going to like that kind of attitude."

The stock sales also could resonate with middle-class jurors who don't have multimillion-dollar lines of credit from Fortune 500 companies.

Unlike Skilling, Lay isn't charged with improper stock sales. An in-house Enron lawyer advised him that stock sales back to the company couldn't be an insider trade because ostensibly the company has as much information about itself as Lay.

Just months before Enron failed, the ex-chairman touted its falling shares as an "incredible bargain" and even told workers and regulators he had exercised options to buy more stock himself.

He didn't share that he was selling tens of millions of dollars in Enron stock back to the company to repay a line of credit he repeatedly tapped for cash to pay down his personal bank debt.

Lay told jurors again and again he didn't have to. Securities and Exchange Commission regulations at the time required executives to disclose stock sales back to a company the year after they occurred.

When asked if he realized how important it was for employees and investors to know when a CEO buys or sells stock, Lay said yes. But when asked if he could have chosen to reveal his sales despite regulations that allowed him to postpone that disclosure, he replied, "I don't know if that's a discretionary item or not."

It isn't now. Brown noted that a 2002 post-Enron law requires a CEO who sells stock back to a company to publicly report it within two days of the sale.

"I call that the Ken Lay provision," Brown said.