Former Enron Corp. chief executives Jeffrey K. Skilling and Kenneth L. Lay should stand trial together because they engaged in a "single overarching conspiracy" to enrich themselves by inflating the Houston company's stock price, prosecutors argued in court papers yesterday.
The Justice Department's Enron Task Force said that granting the defendants' request for separate trials would lead to an "enormous waste of resources" since prosecutors intend to use the same "core group" of witnesses to testify against both men. Lawyers for Lay, Skilling, and former Enron chief accountant Richard A. Causey last month asked a judge to order separate trials, citing the many different criminal charges and a torrent of negative publicity if the men are tried together.
In response, prosecutors said that giving separate trials to defendants who are accused of taking part in a conspiracy is the "rare exception" in the law. They asserted that the allegations against all three men are connected because they took part in a broad scheme to pump up Enron's stock by using accounting gimmicks and falsely optimistic public statements.
Skilling and Causey are charged with being at the center of the alleged conspiracy from 1998 to 2001, while Lay's indictment almost exclusively focuses on the last half of 2001, when he took over day-to-day control of the company after Skilling abruptly resigned. All three men have pleaded not guilty.
Even though only Skilling and Causey face criminal insider trading charges, the bank fraud charges against Lay follow a similar pattern, the government argued, because all three defendants acted for "personal gain."
Prosecutors also offered a backhanded criticism of recent public statements by Lay, who has argued that he would be harmed by publicity from a "mega trial" of all three defendants.
"There will undoubtedly be public interest in a trial of Lay, whether or not he is tried with Skilling and Causey," the government said. "Certainly Lay, who has himself retained multiple publicity agents and undertaken an intense national media blitz replete with staged television and print interviews, has hardly carried his burden on that score."
Separately, lawyers for Lay, Skilling and Causey yesterday asked the judge to force the government to provide more details about the more than three dozen alleged crimes for which they have been charged.
U.S. District Judge Simeon T. Lake III has said he will rule on the requests for separate trials sometime in late September or early October.