Enron Case A Grueling Trial for Its Lawyers

By Carrie Johnson
Washington Post Staff Writer
Monday, May 29, 2006

HOUSTON, May 28 -- The unyielding preparation, the sleepless nights spent in a dingy room far from his wife and four children, whom he visited only twice in six months, all came down to this: a few hours of questions in the case of a lifetime.

Assistant U.S. Attorney John C. Hueston strode briskly into the courtroom with his eyes on a man he had pursued with unusual intensity for more than two years, former Enron Corp. chairman Kenneth L. Lay.

The Southern California prosecutor, who has a compact build and a gleam in his eye, squared his shoulders and steeled himself for a fight. In the hour that followed, including a court break in which he maintained his focus by doing push-ups in his office, Hueston, 42, accused Lay of contacting witnesses during the four-month trial in an effort to "get your story straight."

Hueston's chilly persistence left the once-genial corporate chieftain, who had been expected to flash his charm like a get-out-of-jail card, stammering and angry, drawn for the jury in a few quick strokes as a micromanager who thought he could talk his way out of trouble with a handful of well-placed phone calls. Jurors said that "controlling" attitude stuck in their minds as they found Lay guilty of a half-dozen conspiracy and fraud charges Thursday.

A smiling Hueston appeared before camera crews at an outdoor news conference after jurors handed up their resounding decision, saying that Lay and former chief executive Jeffrey K. Skilling, who was also found guilty, had sealed their fates with lie after lie. The following day, Hueston flew home to California and took his children go-karting, leaving behind the sign in his temporary Houston office that urged him: "Play like a champion today" -- a University of Notre Dame invocation.

The trial, the capstone of the government's efforts to hold corporate executives accountable for fraud that occurred while they were in charge, required both sides to be at the top of their games. In a case that featured no smoking-gun documents or "gotcha" moments, the skill of the advocates on both sides took on special importance, said experts who followed the trial.

The single-minded pursuit of Lay and Skilling ended in success for the Justice Department's Enron Task Force. But the four-year drive was not without conflicts over strategy and personal style for lawyers on both sides of the monumental effort, one of the most complicated corporate cases in history.

The government team stayed on course largely under the guidance of task force director and Chicago prosecutor Sean M. Berkowitz, a marathon runner who turned 39 two days after the verdict. Colleagues call Berkowitz unflappable, and he behaved true to form, even when government projection specialists stumbled and failed to find documents quickly as he cross-examined Skilling. Berkowitz parceled out key witnesses to members of his team without considering his own ego.

He was the man who also made peace among squabbling colleagues and delivered the final -- and, according to jurors, the convincing -- rebuttal argument in a smooth baritone, snapping his fingers for emphasis. Paraphrasing a line from the Jack Nicholson character in the film "A Few Good Men," Berkowitz told the jury that Lay and Skilling resorted to falsehoods because "Enron couldn't handle the truth."

Berkowitz, who pokes fun at his bald spot and rides motorcycles in his spare time, overrode the occasional interpersonal conflicts over resources and speaking roles among the team of nine lawyers, 15 agents, five paralegals and six others. He pushed -- despite opposing views -- to strike a plea deal only weeks before the trial with former Enron accounting chief Richard A. Causey. That helped slash more than a half-dozen witnesses from the case and also deprived Skilling and Lay of a scapegoat to blame if things started to go sour.

The government victory was by no means a sure bet. Skilling's lead defender, Daniel M. Petrocelli, an entertainment lawyer from Century City, Calif., appearing in his first criminal trial, outtalked everyone else on his side of the courtroom, including highly touted and far more experienced advocates hired by Lay, according to lawyers who watched the trial. Petrocelli, 52, emerged as a clear leader of Skilling's defense as he marshaled help from more than a dozen junior lawyers, three law partners and a team of paralegals and support staff, including Skilling's wife Rebecca Carter, his younger brother Mark and his longtime assistant Sherri Sera. A separate unit of three document specialists set up an aluminum table bearing laptop computers directly outside the courtroom and often raced in with papers and opposition research to help the lawyers in the middle of the action.

Surprisingly to Houston's legal community and trial watchers who had mostly underestimated him, Petrocelli's command of the facts equaled his theatrical style, as he rattled off arcane measurements of financial risk and accounting rules without glancing at notes. He left the eight-women, four-men jury smiling -- and left a series of government witnesses withering under his strong-armed attack. Juror Doug Baggett said that during much of the case, he felt like a "Ping-Pong ball," as his opinions vacillated back and forth after incisive questions by the defense team.

A man who keeps his salt-and-pepper hair and his fingernails as carefully manicured as some of his movie-star clients', Petrocelli won praise from hard-bitten U.S. District Judge Simeon T. Lake III, who is not known for being a fan of defense lawyers. Government witness Ben F. Glisan Jr., Enron's former treasurer, acknowledged Petrocelli's talent even as the defense lawyer sought to rip apart his testimony. Even jurors who ultimately convicted Skilling on 19 of 28 criminal charges against him praised Petrocelli, who walked out of the courthouse looking ashen and shell-shocked after the verdict. Inside the building, however, elementary school principal Freddy Delgado told reporters that if he ever ran afoul of the law, he would hire Petrocelli, "if I had the money." His fellow jurors erupted with laughter.

Petrocelli's law firm, O'Melveny & Myers LLP, received a $23 million retainer from Skilling, but the defense lawyer said the defense spent many millions of dollars more, though he would not say how much. He received crucial support from partner M. Randall Oppenheimer, 53, whose most visible courtroom role involved questioning accountants and technical experts but who performed important strategic work behind the scenes. Oppenheimer, a gray-bearded private pilot and the son of a film director who once visited the trial, combined razor-sharp intellect with a mild-mannered, dignified delivery. His understated manner won him respect from the government team and greater leeway from the judge, who coined "the Oppenheimer rule," which allowed lawyers in the long trial to get in "just one more question" after their opponents' objections.

Perhaps the O'Melveny team's greatest accomplishment was keeping in check the mercurial temper of its client. Skilling, 52, followed his lawyers' advice and generally remained cool over eight days on the witness stand, in the face of expectations that his emotions might detonate and come back to hurt him with the jury.

As they maintained control of Skilling, his defense lawyers also successfully cultivated an important alliance with Lay's team, which resisted the temptation to blame Skilling for Enron's misfortunes. That O'Melveny picked up the tab for experts and other pricey legal bills likely helped preserve goodwill between the defense teams. But it also took no small amount of Petrocelli's persuasion.

If Skilling's legal team rose above expectations, Lay's failed to live up to them. Lead lawyer Michael W. Ramsey, 66, armed with a string of victories in murder and public-corruption cases in his four-decade career, sat on the bench for nearly the entire defense case after doctors implanted stents to open his clogged arteries. But Ramsey, who received $2 million from Lay, had run into trouble even before his health deteriorated.

In his opening statement Jan. 31, Ramsey twice called on securities lawyer and fellow Lay defense lawyer Bruce Collins to confirm facts in the case. The judge took Ramsey to task for asking the government's first witness irrelevant questions, prompting Lay to pull him aside during a courtroom break. And in his cross-examination of former chief financial officer Andrew S. Fastow, Ramsey shouted when Fastow, who has a hearing problem, said he could not understand the lawyer's inquiries. Jurors and spectators flinched at the spectacle. Ramsey later told reporters that he was worried he had had a heart attack during the Fastow episode.

With Ramsey out of the game, the Lay defense was in chaos and eventually settled on appellate lawyer George "Mac" Secrest to lead the questioning of Lay. That decision was made only a few days before Lay's turn on the witness stand, the most important turning point in the trial. Lay, who kept firm control of his legal team, balked when Secrest asked him to talk about his personal finances and other issues, once asking his own lawyer, "Where are we going with this, Mr. Secrest?"

After news reports criticized the performance, Lay's daughter, Elizabeth Vittor, a lawyer who sat next to him every day and helped coordinate his defense, told reporters Secrest had done a "fabulous" job. Vittor did not question any witnesses in the trial and instead appeared to serve as a behind-the-scenes advocate for her father, who had amassed $100 million in debt in 2001, the year Enron filed for bankruptcy, and who spent less on his legal defense than Skilling.

It remains unclear whether Ramsey's presence would have helped Lay. During cross-examination, prosecutors used some of Ramsey's negative comments from earlier in the trial about government witnesses against Lay. And there is little doubt that Lay's strong emotions about Hueston, whom he has accused of leading a vendetta against him, would have boiled over when the two men faced off anyway. During closing arguments, Chip B. Lewis, a young, goateed defense lawyer for Lay who could fill a doorway with his solid frame, stood over Hueston and bellowed, "Don't come to Houston, Texas, and lie to us."

In the end, in a contest of will between prosecutors and defendants Skilling and Lay, the jury found the government more believable.

As Berkowitz confronted Skilling with evidence that one of his investments violated Enron's ethics code, Skilling shot back: "What does this have to do with fraud at Enron?"

The prosecutor was ready with a potent answer: "When we started this testimony, we agreed, that the one thing, the most important thing the jury had to rely upon here was your word."

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