Two finally come to trial on Enron charges

Jeff Skilling

HOUSTON - Former Enron Corp chiefs Ken Lay and Jeffrey Skilling finally came to trial today, vowing to fight charges they led the company into the biggest US bankruptcy of its time by lying to investors while enriching themselves.

The long-awaited day in court comes more than four years after the former energy trading giant collapsed in disgrace in a December 2001 scandal that set off a wave of corporate scandals and tainted the Bush administration.

The two men said little as they arrived separately at the US courthouse in downtown Houston for the start of jury selection in a trial expected to last four months.

"I'm fine, thank you," Lay said in answer to a question from a horde of reporters and cameramen who surrounded him as he walked in with wife Linda and attorney Mike Ramsey.

As jury selection began, US District Judge Sim Lake introduced Lay and Skilling to the 100 potential jurors gathered in a large courtroom, then gave them an overview of the charges that could send the two to jail for decades.

"This will be one of most interesting and important cases ever tried," Lake told them.

"We are not looking for people who want to right a wrong or provide a remedy for those who suffered in the collapse of Enron. We want 16 jurors who, although they do not relish being jurors in a four-month trial, nevertheless view jury service as a civic responsibility," he said.

Lake has said he wants to complete the selection of 12 jurors and four alternates on Monday and hear opening arguments on Tuesday.

Lay and Skilling presided over Enron as it rose to become the seventh largest US company, then plummeted into bankruptcy.

It was the first of a series of major corporate scandals that enveloped firms such as HealthSouth, WorldCom, Global Crossing and Adelphia and led to the passage of the 2002 Sarbanes-Oxley Act that toughened financial reporting and auditing requirements for publicly owned companies.

Combined, Lay and Skilling face more than three dozen fraud and conspiracy charges that accuse them of lying about the company's financial state while they filling their bank accounts by selling millions of dollars in stock.

Both have vigorously denied any wrongdoing and have spent millions of dollars mounting a defence that Lay on Sunday said he believes will be successful.

"We're going to have a long trial and a tough trial, but we're going to be fine," he told reporters after he attended church.

Lay at one time tried unsuccessfully to get help from the Bush administration, counting on the close ties to President George W. Bush he developed as a major campaign contributor.

He and Bush were close enough that Bush gave him one of his oddball nicknames: Kenny Boy.

Skilling and Lay say Enron was a good company done in by Wall Street panic after disclosures that Enron had used off-the-books deals directed by its chief financial officer, Andrew Fastow, to hide billions of dollars in debt and inflate profits.

Fastow has pleaded guilty to two conspiracy counts and agreed to testify against his former bosses in exchange for a maximum 10-year prison sentence.

Enron's demise left thousands jobless and wiped out billions of dollars in workers' retirement accounts -- a factor that defence lawyers complained tainted the jury pool.

So far, 16 people have struck plea deals with the US Department of Justice's Enron Task Force for activities at the company, and five others, including four former Merrill Lynch employees, have been found guilty at trial.

Arthur Andersen, the accounting firm that audited Enron's books and saw its business ruined by its battered reputation, had its conviction for destroying documents overturned by the Supreme Court last year, and prosecutors subsequently dropped the case.

- REUTERS