Enron jury ends first day of deliberations
In closing arguments, government asks jurors to weigh facts of the case and ignore character witnesses.
HOUSTON (CNNMoney.com) - The fates of Enron founder Kenneth Lay and former chief executive Jeffrey Skilling are now in the hands of the jury, which ended its first half-day of deliberations Wednesday afternoon.
The jury will resume deliberations at 9 a.m. ET Thursday.
One thing the jury did decide: it will deliberate Mondays through Thursdays from 9 a.m. to 5 p.m. ET until a verdict is reached, according to defense attorneys.
Wrapping up closing arguments Wednesday, government prosecutor Sean Berkowitz reminded jurors to weigh the facts of the case, adding "you get the final word in this historic case. You get to decide whether they told the truth or whether they lied. Black and white."
Berkowitz asked the jury to view the last 16 weeks of documents and testimony with "common sense and reason" and dismissed the defense team's assertions that the government bullied former executives to get testimony.
"This isn't Hollywood, we didn't make this up," Berkowitz said as he paced in front of jurors. "We didn't go out to central casting to find these people."
At the heart of Skilling and Lay's defense is the notion that not only are the two innocent of any crimes but that there were no crimes committed at Enron. During an impassioned closing argument Tuesday, Skilling's lead attorney Daniel Petrocelli dismissed the 22 witnesses presented by the government as people "robbed of their free will" being used to bolster a weak indictment.
But Berkowitz defended the government's case and suggested that the defense's assertions that Lay and Skilling were the victims of a government conspiracy were ludicrous.
"Plea agreements are perfectly legal," he said. "You may not like them but that's the way the justice system works." He added that the testimonies were corroborated by other witnesses and supporting documents.
With just over two hours to finish the government's rebuttal, Berkowitz meticulously reviewed the charges against both Lay and Skilling. He said the defense was trying to appeal to the jury's sympathy.
He said what was obvious was that the two men put their own financial interests and egos ahead of the best interest of Enron by fudging earnings figures to beat analysts' expectations and entering secret side deals with former financial chief Andrew Fastow to move millions in dollars of losses off of the company's balance sheet.
And he added that as both executives became increasingly aware of the financial troubles facing the company, they continued to mislead analysts and their own employees about the true health of the company in order to prop up Enron's waning stock price.
Turning to the company's retail energy services business, Berkowitz said the company's decision to move millions of dollars of losses from retail into the profitable wholesale business as Skilling and Lay continued to tell the public that retail was a strong business was clearly fraud.
"It is a crime to omit material information about your business and that's what happened, ladies and gentlemen," Berkowitz said.
And he tackled Enron's troubled broadband unit as well, telling jurors that the defendants' made optimistic statements about the business while knowing it was in trouble.
"This isn't a litmus test on whether these are good people," Berkowitz said, dismissing the testimony of character witnesses who spoke on behalf of Lay and Skilling. "This is about their character at Enron, their credibility at Enron."
He said the defendants' investment in a small start-up company called Photofete that was run by Skilling's ex-girlfriend but was never disclosed to investors showed the lack of credibility and honesty of both men.
And Berkowitz pointed to millions of dollars in stocks sales that both men made as Enron's troubles began to accelerate. While only Skilling has been charged with insider trading, the government said Lay's decision to sell millions – sales he said were forced to meet margin calls – without disclosing it to investors violated the public's trust.
Skilling faces 28 counts of conspiracy and fraud, including charges of insider trading, while jurors will have to weigh six counts of fraud and conspiracy for Lay. If convicted, legal experts believe both Lay and Skilling could face 20 to 30 years in jail.
But for Lay, deliberations in this trial mark the beginning of a second - and some say more dangerous - trial. Lay will face another four counts of bank fraud for personal loans at a separate bench trial before Judge Sim Lake on Thursday.
The bank fraud trial is expected to take only a few days, but the judge won't issue a verdict until after the jury returns with a verdict in the case against Skilling and Lay. The jury will determine its own schedule and its not yet clear if they will choose to deliberate on Friday.
For a look at the background of the trial, click here.
Will closing arguments matter in the Enron case? Read the full story here.