'God bless and good luck'
Enron's Glisan tells the jury about solitary confinement, and why they should believe his testimony this time.
HOUSTON (FORTUNE) - On Monday, the Enron trial reached a milestone of sorts: It will be the 31st day of testimony.
Indeed, at the end of court on Thursday, Judge Sim Lake thanked the jurors for their 30th day of service, and gave them a raise to $50 a day each. One juror twirled her finger in a sarcastic gesture of "yippee." But on several occasions, Lake has thanked the jury for the terrific job that they're doing, and indeed, they seem to be paying attention assiduously -- that is, most of the time. You can almost hear a sign of "Oh, no" from the jury box when the subject of Raptors comes up.
Thus far, the trial has been an odd mix of heavy-duty accounting and telling anecdotes interspersed with revealing looks at what Enron has cost the witnesses. For instance, much of Thursday consisted of Dan Petrocelli's tough, effective cross-examination of star witness Ben Glisan, a cross that began a brutally revealing look at Glisan's years in jail.
"I would not wish this on anyone," said Glisan, who off the bat was put in solitary confinement for almost two weeks, which he described as "a shock." Indeed.
Then, he lived in an 8 by 12 foot cell with a "solid metal door" and two roommates. When he was "hauled" in to testify in front of the grand jury, he was in shackles. That just happened to be the day that Jeff Skilling was indicted -- and the two men met in courthouse elevator. "God bless and good luck," they said to each other.
"Did you believe that was a coincidence?" asked Petrocelli. "I didn't believe that, no," responded Glisan.
Petrocelli made it clear that while Glisan may not have much to gain from his current testimony -- Glisan is supposed to be released in September 2006 -- desperation to win some leniency and be moved to a minimum security camp (which he eventually was) could still have been his motive for changing his tune.
Glisan, as has been the case with all the witnesses, initially defended his actions at Enron even in testimony under oath -- and the defense has made it seem at least plausible that there has been some degree of coercion behind all the about-faces. Glisan, for his part, insisted that in testifying, he faced risk, not reward, because his jail time could be lengthened if he perjured himself.
The exchanges between the two men were at times tense. "Can you answer my question?" demanded Petrocelli at one point. "I'm trying to," snapped a clearly agitated Glisan.
Prosecutor Kathy Ruemmler objected to one particularly extended not-quite question by Petrocelli, saying, "At this point, it's like a running monologue...Mr. Petrocelli should ask a question and let the witness answer."
Glisan's voice cracked noticeably at one point, not because he was crying, but rather because he was angry, as Petrocelli repeatedly cut off his answers. Judge Lake finally said, "When you ask a long question, it is appropriate for the witness to give more than a yes or no answer."
Petrocelli scored most of his points in two main areas. Over and over again, he reiterated that there were no documents backing up many allegations, that in Glisan's copious notes there was "not a word in there about Mr. Skilling committing fraud...that he made any promise to anybody to do anything wrong...there's nothing in there about bear hugs." (Oh, those bear hugs.)
While Glisan conceded that much of what he knew was second-hand information from Andy Fastow, he continued to insist that Skilling understood that there was no economic rational for the Raptor transactions and that "accounting rules do not allow a transaction that is in and of itself an accounting artifice."
You also have to give Petrocelli kudos for saying what many of us were thinking. On Wednesday, Glisan noted how his habit of occasionally drinking a bottle of wine during a dinner out, and regularly drinking several glasses after coming home from work, qualified him for a prison alcohol dependency program, the completion of which will reduce his jail time.
"If you have a drinking problem, I'm in serious trouble," said Petrocelli. Ummm, yeah. Glisan insisted that government lawyers were "surprised" to learn about this particular deal.
There was one moment when Petrocelli seemed to retreat from a central claim of the defense -- which is that Enron was a perfectly healthy company. He began to rant -- and it was a rant -- about how Skilling and Lay, not Glisan, were paid "extraordinary sums of money" to make the tough decisions about what was best for Enron's shareholders.
"You didn't have the right to substitute your judgment for their judgment," said Petrocelli. "It is very damaging for a CEO to get on a conference call and say, 'Our business is in the toilet'...they [Skilling and Lay] were fighting for their company." All of that is probably true. But a company whose business is "in the toilet" is not a "shining star," as Petrocelli claimed in his opening statement.
Lay lawyer Bruce Collins barely got started on his cross-examination of Glisan before Lake called it an afternoon. Thus far, Glisan is handling Collins better than he did Petrocelli (although he did concede that what he termed Lay's "giggle" upon learning of the Raptors could also be called a "chuckle") but there will be more -- far more -- to come on Monday.
After Glisan is through, the prosecution will call several more witnesses in order to tie up some loose ends. And then, it'll be the defense's turn. Expect something far different than what you see in most criminal cases, where defense lawyers simply seek to poke holes in the prosecution's argument. In this case, the defense is likely to try to tell a totally different narrative of Enron.
Fittingly enough, the stars of the show will be none other than Ken Lay and Jeff Skilling. It is probably not an overstatement to say that the outcome of the case will hinge on how well both men perform on the stand.