Lawyers for former Enron Corp. chief executive Kenneth L. Lay yesterday urged a federal judge to cut him loose from a broader fraud case against the Houston energy company's top executives and send him to trial alone within weeks.
But the judge deflected Lay's request for a trial to start Sept. 14 and instead said he would rule on several motions yet to be filed by defense lawyers but not until late September or October.
"It would be premature to set the case for trial," U.S. District Judge Simeon T. Lake III said, according to Bloomberg News. "This case is far more complex than the usual white-collar fraud case."
Yesterday's court hearing was a prelude to what prosecutors have called the premier trial involving corporate fraud. Enron's December 2001 bankruptcy filing was the first of several business scandals and led to corporate-reform legislation.
Defense lawyers for Lay argue that his 11-count bank fraud and false statements indictment deals only with a few months leading up to the bankruptcy. By contrast, the 53-count securities fraud and insider trading case against his co-defendants, former chief executive Jeffrey K. Skilling and accounting chief Richard A. Causey, dates back to 1999, encompassing years of allegations that Lay claims would unfairly bias a jury against him.
All three have pleaded not guilty.
Prosecutors at the Justice Department's Enron Task Force argue that the cases are related because Lay took control of an ongoing conspiracy after Skilling abruptly resigned in the summer of 2001. Government lawyers want the judge to schedule a trial for all three defendants in March 2005.
But Skilling and Causey have asked the judge to wait until at least 2006, citing millions of pages of documents and testimony they must pore over for evidence that could help the defense case. Defense lawyers for both Skilling and Causey said in court papers filed earlier this week that they, too, will ask to be tried individually. Skilling and Causey also plan to ask the judge to move the case out of Houston, where thousands of residents lost their jobs and retirement savings after Enron collapsed.
Once ranked seventh on the Fortune 500 list of the nation's biggest public companies, Enron fell apart amid disclosures of billions of dollars in concealed debt and secret business partnerships run by then-finance chief Andrew S. Fastow. Fastow pleaded guilty earlier this year and has agreed to testify against Lay, Skilling and Causey. Defense lawyers already have begun an effort to attack his credibility in public statements to the media.
Yesterday Lake ordered all sides to submit filings on separate trials by mid-September. Motions on the location of the trial will be due a few weeks later. Only then will the judge set a trial date.
The hour-long hearing was the first time Lay and Skilling had appeared together in court. After Michael Ramsey, Lay's lead defense attorney, launched into an explanation of alleged weaknesses in the government's case, the judge batted him back by saying, "Why don't you save the press conference until after this hearing?" according to the Associated Press.
After the hearing, Daniel M. Petrocelli, lead trial counsel for Skilling, criticized prosecutors who, he said, "indiscriminately dumped tens of millions of documents on us" but said he was pleased with the judge's response to his concerns.
Andrew Weissmann, director of the Enron Task Force, declined to comment yesterday. Defense lawyers for Lay and Causey could not be reached late yesterday.