Enron chiefs' battle plan? Themselves
Testimony of former Enron executives Kenneth Lay and Jeffrey Skilling will make or break their own case.
By Shaheen Pasha, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - For Enron founder Kenneth Lay and former chief executive Jeffrey Skilling, the man in the mirror may prove to be their best bet for an acquittal.

After a solid presentation of the prosecution's case -- ripe with juicy testimony from former top executives accusing Lay and Skilling of knowingly misleading investors about the true financial health of the company -- the defense will present their side of the story to jurors starting Monday.

Find out who you might have seen at the Enron trial, how they got involved, and what they're doing now.
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But so far the defense team, led by Lay's attorney Michael Ramsey and Skilling's attorney Daniel Petrocelli, is having a tough time pinning down any former Enron executives to speak on the behalf of the defendants.

That leaves Lay and Skilling to fend for themselves, bolstered only by a handful of character witnesses, relatively low-level former Enron employees and so-called "expert" witnesses. And legal experts expect it to be an uphill battle for the defense to convince jurors that they are not only innocent of the crimes they've been accused of but that there was no actually crime committed at Enron, with the exception of a few shady dealings by former financial chief Andrew Fastow and his minions.

Shifting the focus

"Typically when the defendant takes the stand in a criminal case, it changes the dynamics of the case substantially," said Sheldon Zenner, head of the white collar practice at Katten Muchin Rosenman, a Chicago-based law firm. "It shifts the focus for the jurors from evaluating if the government put their case beyond a reasonable doubt to whether the defendants are believable."

And that's where it gets tricky for Lay and Skilling.

Legal experts said defense attorneys very rarely let their clients take the stand because it opens the door for a vicious cross-examination by the prosecution. And the stakes get higher to make sure that the client comes off as not only credible but also likeable.

Jacob Zamansky, principle of Zamansky & Associates, a New York-based law firm that represents investors, said all eyes will be on Skilling's demeanor when he takes the stand the week of April 10.

"Skilling is known to be a volatile guy with a temper and if he comes off as trying to be smarter than or better than everyone else, that could really alienate the jury," Zamansky said. "Humility is the key when taking the stand."

While Lay, who is generally considered to be more affable, may be a better bet on the stand, particularly under tough cross examination, Zamansky said he will face some tough questions regarding the bullish outlook he gave investors and employees in the last few months before Enron imploded into bankruptcy in December 2001.

"The defense has got some real trouble if they're relying on the defendants testimony" to win their case, said Jim Parkman, an attorney in association with the Cochran Firm, who successfully defended HealthSouth (Research)'s former CEO Richard Scrushy in a similar fraud case. "For each little item that hurt them in the government's case, they need to produce witnesses to interject some evidence to show the other side. If they can't do that at all, they're in real, real trouble."

The defense team presented presiding Judge Sim Lake with a potential witness list Tuesday that encompassed over 100 individuals, including several former high-ranking Enron employees who have not been charged with crimes. However, most of those witnesses are expected to invoke their Fifth Amendment right against self-incrimination.

And that's hardly a confidence-building move for the defense.

The defendants will make or break the case

Zenner said Lay and Skilling will ultimately make or break their own case, depending on how persuasive they can be for jurors.

"They have a lot of explaining to do and that will be the significant challenge," he said. "They don't just have to change the jurors perception about one incident. This indictment involves a wide range of conduct and they're going to have to explain it all."

Legal experts expect Lay and Skilling to testify that the accounting transactions at the heart of the case were complex and were put into place only after outside lawyers and accountants signed off on their suitability. That's an argument that could sway a jury if Lay and Skilling convincingly show that they thought what they were doing was legal. But it is a hard sell.

"Relying on lawyers isn't a legal defense if it can be established that the person knew they were engaging in illegal or fraudulent activity," Zamansky said. "If the whole purpose is to mislead investors, that's evidence, not a defense."

But legal experts say the defense's case does have some hope, particularly in the lack of documentary evidence supporting the testimony of the government's witnesses that Lay and Skilling directed their employees to break the law.

Aside from a copy of the now infamous Global Galactic list, which Fastow presented as evidence of his side dealings with Skilling and which the defense has suggested were fabricated, witnesses admitted on the stand that there was no paper trail implicating either defendant.

Still all bets are on Lay and Skilling own words.

"Everything now becomes whether jurors believe in them or not," Zamansky said. "No one can help them but themselves."

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Is the defense strategy brilliant or just crazy? Find out here.

For CNNMoney.com's complete coverage of the Enron trial, click hereTop of page

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Market indexes 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. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.