Special report: Enron on trial Full coverage
Enron: Some things don't change
The trial is over, and whatever the verdict, it's clear the Enron story will remain one of corruption and cheating at the highest echelons of a major corporation.
By Bethany McLean and Peter Elkind, FORTUNE editors-at-large

NEW YORK (FORTUNE) - After three and a half long months, the Enron trial has drawn to a close.

Yesterday morning, before prosecutor Sean Berkowitz began his rebuttal argument -- the final words that the jury will hear from a lawyer in this case -- the packed courtroom was humming with energy. Lay and Skilling's families, the press, the interested public...they had all piled in, and everyone was standing, chattering. The mood was almost giddy.

Ken Lay (left) and Jeff Skilling (right).
Ken Lay (left) and Jeff Skilling (right).
Find out who you might have seen at the Enron trial, how they got involved, and what they're doing now.
Launch gallery

When Berkowitz began, the room fell silent. And now, a day later, the evidence, the arguments -- it's all over. Of course, one big question remains. (That question is probably a bit too obvious to mention.)

But some things are perfectly clear. One is that there isn't going to be any major rewriting of the Enron story, which is a story of corruption and cheating at the highest echelons of a major American corporation, a story that has captivated and shocked the public since Enron's implosion in late 2001.

Although defense lawyers insisted almost throughout the trial that Enron was a "shining star," it's as difficult for any person with any knowledge of how business works to believe that now as it was at the beginning of the trial.

The best defense lawyers could do was to argue that this super-strong company, once the 7th largest company in America, collapsed because of shortsellers and the press ("We're going to prove it," promised Lay's lead lawyer, Mike Ramsey, in his opening statement) and that everything that happened at Enron was "business as usual."

Needless to say, the defense did not prove their ludicrous theory. And as Berkowitz said in the beginning of his rebuttal, "If what you've heard is business as usual in corporate America over the last four months, ladies and gentlemen, I'd suggest that we all take our money out of the stock market and nobody should ever put another nickel in there." (Forget inflation: Maybe Berkowitz's warning explains why the market fell so dramatically yesterday!)

'A tortured soul'

That means that neither Lay or Skilling will get one of the things they want, which is exoneration in the court of public opinion. As Dan Petrocelli, Skilling's lead lawyer, said of his client during his final words to the jury, "And he's a tortured soul now for the rest of his life, what happened to the business that he built and now forever what it will be known as. That's his legacy. Can't do anything about that." No, you can't.

But another thing is clear too, and that's that the parties that were represented in that Houston courtroom - the defendants Jeff Skilling and Ken Lay on one side, and the American people on the other side - have gotten their money's worth from the lawyers who tried the case. That means that in the court that most matters to Lay and Skilling - this criminal court - it is still an open question as to whether or not they will get the exoneration they seek.

The government lawyers took a very complicated case, one that could easily have gotten bogged down in stultifying accounting minutia, and presented a compelling theme of "lies and choices," just as prosecutor John Hueston promised in his opening statement. True, there weren't any smoking guns, but no one who knew this story expected any. There also weren't any blow-ups, any times where the government was caught flat-footed, or where a cooperating witness had his credibility utterly destroyed.

While the big picture defense of Enron as model corporation may or may not have been saleable to a jury, down in the weeds of the case, in the specific documents and testimony upon which a verdict will hopefully be based, lawyers for Jeff Skilling and Ken Lay - far more so Skilling's team at O'Melveny & Myers - were incredibly skilled at presenting an alternate, albeit at times patently absurd, explanation for almost (almost) every issue raised by the prosecution.

Will that be enough to cause reasonable doubt in one juror's mind? Will at least one juror believe, as defense lawyers argued in their final moments, that while Jeff Skilling and Ken Lay may have made mistakes at Enron, they didn't have criminal intent? Or as Mike Ramsey, Lay's lead lawyer, put it: "When you're say not guilty, you're not saying innocent. You're saying not proven to my satisfaction without hesitation." Will at least one juror say, "not proven to my satisfaction?"

Probably the most important issue the jury will have to weigh is whether or not to trust the word of the nine alleged accomplices who testified that either Lay or Skilling, or both, knew about criminal wrongdoing at Enron. There isn't an easy answer, and Judge Sim Lake didn't provide one.

He told the jury that "an alleged accomplice, including one who has entered into a plea agreement with the government, is not prohibited from testifying. On the contrary, the testimony of such a witness may alone be of sufficient weight to sustain a verdict of guilty." But, he added, "You should keep in mind that such testimony is always to be received with caution and weighed with great care."

Witnesses 'robbed of their free will'

In their closing arguments, as they were expected to do, defense lawyers attacked both the government and the witnesses. Petrocelli told jurors that cooperators were "robbed of their free will," and that the prosecutors went so far as to "create fake testimony." (While Petrocelli made a point of saying that he wasn't accusing the prosecutors of misconduct, he in fact was doing exactly that.)

"That's the evidence that they've built this whole case around. Coercion. What's on trial here folks is fear. I never thought I would see the day," he ranted.

He pointed out that in several cases, the government had witnesses who could have corroborated key testimony - but the prosecutors didn't even ask the questions. Does that imply that the stories wouldn't have meshed?

Lay's lawyers were almost as vitriolic. "Those kinds of witnesses are absolutely radioactive. They glow in the dark," said George McCall "Mac" Secrest, one of Lay's lawyers. He too accused the prosecutors of using "the power of compulsion."

Petrocelli's powerful rhetoric may have crossed the line into absurdity, as Berkowitz was quick to point out in his closing argument. "They're suggesting a massive conspiracy. They're suggesting that you've got eight individuals at Enron who, after the bankruptcy, would all plead guilty to something that they didn't do, and that we'd get their lawyers involved, some of the highest paid defense lawyers...the prosecutors have to be in on it as well, of course. The defendants, their lawyers, the prosecutors. And we got to tell such a good story that be so compelling that we can convince federal judges in this building that they committed a crime before whom they pled guilty...we got to make sure that their stories are consistent with all of the millions of documents that are out there."

Most interesting, though, was the sharp, dramatic contrast between the incredibly arrogant tone that defense lawyers took in their opening statements, and the humility they showed in their closing arguments. Skilling "made a lot of mistakes," said Petrocelli. "Mistakes are not a crime. They may lead to liability in a civil case...and God knows, he's been sued in 200 cases. If he made mistakes and it violates civil laws, then he'll have to deal with that, but this is a criminal case. Mistakes are not a crime."

Lay's lawyers said much the same thing. "Another day, another courtroom, actually a courtroom next door, another judge is going to decide the civil actions that were filed by employees and investors to recover their losses. On that day, Ken Lay may receive an adverse judgment, money judgment. This is not that day."

You can't help wondering if Skilling, and particularly Lay, could have done themselves some favors by showing some of that same humility on the stand. But as Petrocelli said early on in this trial, a person's real character eventually comes out on the witness stand, particularly under cross-examination. How much can you blame the lawyers for the arrogance of their clients?

And as prosecutor Kathy Ruemmler said on Monday in her closing argument, that "extraordinary arrogance" is the "exact same tactic that they used when they were running Enron." Another clear truth of this trial is that some things never change. Top of page

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?
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.
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.