Enron Defense Sums Up Its Case

Closing Statements Rife With Emotion

HOUSTON, May 16 -- Defense lawyers for former Enron Corp. leaders Kenneth L. Lay and Jeffrey K. Skilling told jurors that the company's collapse was not a crime and implored them to find both men not guilty if the slightest doubt exists.

In passionate, day-long arguments often appealing to emotion, defense lawyers urged the jury to look beyond five years of public vilification resulting from Enron's disastrous bankruptcy and instead to follow the narrow confines of the law in deciding a verdict in the four-month fraud trial.

The stakes could hardly be higher for Lay and Skilling, celebrated executives before their company became synonymous with business fraud after its December 2001 demise. Mercurial former chief executive Skilling, 52, is charged with 28 counts including conspiracy, fraud and insider trading. Enron's founder, Lay, 64, who once hobnobbed with royalty and the Bush family, faces six criminal charges. A conviction on even one charge could mean an extended prison term for either man.

Skilling's lead lawyer, Daniel M. Petrocelli, professed nervousness because, he told jurors, his client's life is "in my hands . . . and then I'm going to turn him over to you, and his fate's in your hands."

"Today you decide whether Ken Lay will be locked in a cage for the rest of his life," Lay attorney Bruce Collins echoed.

The joint defense lawyers attacked the government's case on several fronts. They questioned the credibility of a parade of "radioactive" cooperating witnesses who testified in exchange for reduced prison sentences. They stressed the prosecution's weighty burden of proof and wondered aloud why the government failed to call former accounting chief Richard A. Causey to the stand. And they criticized prosecutors for slinging mud about the defendants' personal investments and stock sales, even as they tossed ample dirt of their own.

In perhaps the most emotional moment in a day replete with vivid rhetoric, Chip B. Lewis, a lawyer for Lay, accused prosecutors of lying about Enron's relationship with PhotoFete Inc., a start-up company run by a former girlfriend of Skilling's in which both defendants invested. The company is not mentioned in the lengthy indictment, but prosecutors raised the issue when both defendants testified to cast doubt on their truthfulness, noting that Lay and Skilling had not informed the board in writing of their investments as the company's code of ethics required.

"Don't come to Houston, Texas, and lie to us," Lewis snarled at members of the Justice Department's Enron Task Force, which is composed of lawyers from across the country.

A low-pitched murmur rose from the back of the packed courtroom, where relatives of Lay and Skilling sat. At the same time, Lay's wife, Linda, and her daughter applauded quietly, as did Skilling from his seat at the defense table. After a moment, Skilling stopped and mouthed the word "sorry" to his lawyer. Lay, meanwhile, sat ramrod straight and scanned the jury.

Earlier in the day, Petrocelli told jurors that the government's 162 questions about PhotoFete during the trial were "a cheap shot."

Both Skilling and Lay argue that Enron fell not because of widespread fraud but because of a market panic fueled by skeptical media reports, questions about the integrity of then-finance chief Andrew S. Fastow, and investors known as short sellers who bet the stock price would drop. Lay and Skilling never doubted the company's health, defense lawyers told the jury Tuesday, and they never led a conspiracy, a charge they called the "centerpiece" of the government's case.

"Look into his soul. See if you see a criminal," Petrocelli said. "See if you see a man with criminal intent. See if you see a man accused of spearheading a massive criminal conspiracy the likes of which you've probably never seen before."