Lawyers for two former Enron Corp. executives yesterday asked a judge to separate their clients' trials from the case against Kenneth L. Lay, the Houston energy company's onetime chairman.
Former chief executive Jeffrey K. Skilling argued in court papers that the government's 11-count bank fraud and false statements indictment against Lay is "entirely separate" from Skilling and focuses on a period after Skilling resigned from the company in August 2001.
Skilling's defense lawyers also asked U.S. District Judge Simeon T. Lake III to privately review witness statements and FBI reports to determine whether the government has evidence that Lay or Skilling's other fellow defendant, former accounting chief Richard A. Causey, ever pointed the finger at Skilling.
The Skilling defense team said it is "too early to know" whether Lay and Causey, who are scheduled to be tried with Skilling, will present "antagonistic defenses" at an upcoming trial. So far, Skilling's lawyers said, there is no evidence to suggest that the men will blame each other for the company's dramatic December 2001 collapse into bankruptcy. If such evidence emerges, it may provide a basis for trying all three men separately, according to the 19-page motion.
Skilling has pleaded not guilty to leading a conspiracy that prosecutors claim inflated Enron's profits and buried billions of dollars in debt. He also is contesting nearly three dozen securities fraud and insider trading charges.
"We believe Mr. Skilling is entitled to a separate trial so that he is not prejudiced in any way by any of the allegations the government is making against the other defendants, particularly since the government's case places heavy emphasis on a time after Jeff left Enron and had no further involvement," Daniel M. Petrocelli, Skilling's lead trial counsel, said in an interview yesterday.
Separately, lawyers for Causey yesterday sought even more from the judge. They asked that Causey be tried alone on fraud, insider trading, and money laundering charges because publicity surrounding his fellow defendants could make it harder for a jury to give the less well-known Causey a fair and unbiased trial. Causey has pleaded not guilty to all the charges.
"The jury's natural tendency will be to lump all of the Enron defendants together and to collectively apply all evidence of alleged wrongdoing across the board," wrote defense lawyers Reid H. Weingarten and Mark J. Hulkower.
Causey's defense lawyers also said that Lay and Skilling each have made public statements indicating a key component of their defense will be to argue that they relied on accountants and lawyers to make business judgments. Causey's attorneys said those experts "presumably" include their client, raising the prospect that Causey could bear some of the brunt of the "conflicting" defenses.
Michael Ramsey, the lead defense lawyer for Lay, already has urged the judge to cut Lay loose from the broader fraud case and to bring him to trial by himself within weeks. Lay has repeatedly proclaimed his innocence since he was indicted earlier this year.
The judge said last week that he would rule on the requests for a separate trial and set a trial date sometime in late September or October.
Prosecutors declined to comment yesterday on the defense requests. The Justice Department's Enron Task Force is set to file a formal response with the court Sept. 10.
Yesterday's court filings are only the beginning of a series of legal maneuvers leading up to what may be the government's premier corporate fraud trial. Enron's demise set the stage for other large business frauds and helped trigger landmark reform legislation.