Sixteen make final Enron jury cut
Corporate 'trial of the century' starts with selection of 4 men and 8 women for jury and 2 women and 2 men as alternates.
By Shaheen Pasha, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - And so it begins.

Just over four years after Enron became the largest bankruptcy in corporate history, costing employees and investors billions of dollars, company founder Kenneth Lay and former chief executive Jeffrey Skilling will finally get their day in court.

Jeffrey Skilling's role in the collapse of the former energy giant is examined in the documentary film
Jeffrey Skilling's role in the collapse of the former energy giant is examined in the documentary film "Enron: Smartest Guys in the Room" from Magnolia Pictures.
Enron founder Ken Lay
Enron founder Ken Lay

Four men and eight women were selected late Monday to serve as jurors, with two women and two men selected as alternates.

Lay and his lawyer emerged from the courtroom at 6:40 p.m. ET and spoke briefly to the media.

"We're convinced that we have a jury that will listen to the evidence," said Lay. "It took all day and a lot of questions, but we think we've got a good jury and we're ready for the trial to start. "

"My fate and Mr. Skilling's fate are in their hands, and we're going to go on with making the case that we're innocent."

Lay's lawyer, Michael Ramsey, said he would have preferred a more drawn-out jury selection process.

"Jury selection is the single most important part of any case. My personal preference is to do it over a period of time but it's not my choice -- it's the judge's," he told reporters. "This is a jury that will pay attention and work hard and that's all we can ask for."

Last-minute efforts by defense attorneys to delay the trial or change the venue were rejected.

Trial resumes Tuesday

The trial is scheduled to resume on Tuesday morning at 9:30 a.m. ET and will recess around 6:30 p.m. ET.

Presentation of evidence begins on Wednesday.

Judge Lake told the jurors, "We are doing everything we can to make this experience if not enjoyable, a friendly and efficient one."

Lay and Skilling watched the jurors as they were selected.

Skilling and Lay arrived at the federal courthouse looking relaxed and poised just after it opened at 9:30 a.m. ET.

They were joined by a pool of 96 potential jurors made up of 54 women and 42 men. About 400 people were originally called to jury duty, with at least 150 dropped for hardship or bias.

During the arrivals, Lay told CNN, "I'm feeling fine. All we're hoping for today is to pick a fair jury that will give me a fair shake, and the outcome will be fine."

Daniel Petrocelli, Skilling's attorney, told reporters, "We're really looking forward to this."

Selecting an impartial jury, however, was no easy task. One potential juror -- a 20-year-old man identified as Juror 45 -- told the judge that he wouldn't be able to give a fair assessment of the evidence, saying "what I honestly feel is that everyone in here has been falsely accused of something at one point or another... you know you were right but you took the punishment for that anyway."

But attorneys for Lay and Skilling were more concerned with those potential jurors who may already have had a negative bias towards the defendants. Defense attorneys had appealed to the 5th U.S. Circuit Court of Appeals last week after Judge Lake refused for the second time to change the trial's venue from Houston. They cited concerns that the defendants couldn't receive a fair trial in Houston due to the deep-running resentment among many of the city's residents who worked for Enron.

Where it all happened

Houston was the epicenter when Enron imploded in 2001. The bankruptcy filing by the company, once the country's seventh largest, cost thousands of employees their jobs and life savings, and led to billions of dollars of losses for investors.

The two men's legal teams have argued that 80 percent of the potential jurors harbored negative opinions about the two men, and that publicity surrounding the plea deal of former accounting chief Richard Causey had further hurt their chances to get a fair trial.

While legal experts said the standard for changing trial venues is rather high, in Enron's case, it may be difficult -- although not impossible -- to find an impartial jury.

"It's rather unlikely that potential jurors either didn't have family members or didn't know people that were directly affected by Enron," said Jacob Frenkel, a former federal prosecutor. "My greatest concern isn't the jurors who are speaking to the court honestly but those that want to get on the jury either to make a point to right the wrong of Enron...or to make sure that they can make the round of talk shows."

Frenkel said Judge Lake's commitment to seating a jury by the end of the day could actually give the defense grounds for appeal if Lay and Skilling are convicted.

"Given the level of bias and prejudgment within the Houston community, there needs to be extra diligence in jury selection," he added.

But Jacob Zamansky, a former prosecutor who now runs a private practice representing investors, was more optimistic regarding the current jury pool. Zamansky, who is attending the trial, told CNNMoney.com that most of the juror interviews indicate that the people remaining after the original screening process do not have preconceived notions about Enron.

"I believe that an impartial jury will be picked," he said, adding that Judge Lake is on track to complete jury selection by the end of the day.

Lay told CNN on Sunday that he was confident about the outcome of the trial despite the judge's rejection of the request to move the trial to another jurisdiction.

"I'd prefer it wouldn't be denied," he said as he arrived at the First United Methodist Church in downtown Houston. "It's whatever it is, and we're ready to go."

"We're going to have a long trial and a tough trial," he said, "but we're going to be fine."

Blaming Fastow

Attorneys for the two defendants have maintained that their clients weren't aware of any criminal activity within the company, pinning the blame on former financial chief Andrew Fastow. Fastow pleaded guilty to two counts of wire and securities fraud in 2003 and was sentenced to 10 years in prison in return for his expected testimony.

Combined, the two men face more than three dozen fraud and conspiracy charges accusing them of lying to investors about the company's financial state while they enriched themselves by selling millions of dollars in stock.

So far, 16 people have struck plea deals with the U.S. 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.

One Enron accountant has been acquitted, and five other executives at its Broadband unit avoided convictions in a trial last year, although they will be tried again this year because their jury could not reach a verdict on some charges.

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

Enron filed for bankruptcy in December 2001 after investigators found it had used partnerships to conceal more than $1 billion in debt and inflate profits.

The Houston-based company's collapse was the first of many high-profile scandals that eventually included WorldCom, Global Crossing, Adelphia Communications and Tyco International. The wave of scandals led to passage of the Sarbanes-Oxley legislation meant to tighten oversight of how American companies are audited.

The Enron trial is expected to last four months with opening arguments scheduled for Tuesday.

-- CNN correspondent Chris Huntington and CNN producers Brian Vitagliano and Winnie Dunbar contributed to this report from Houston.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.