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Jury Selection Begins in Houston for Enron Trial Executives

In Houston, jury selection begins Monday in the trial of two former high-ranking officers of the failed Enron Corporation. Defense attorneys are concerned that the two men may have already been convicted in the mind of the public.

The men facing trial are Kenneth Lay and Jeffrey Skilling, both of whom led the company during the time when prosecutors say it had become a giant shell game, posting false earnings reports and swindling investors. The federal indictment contains seven counts against Lay, the 63-year-old former chairman of the board, and 35 counts against the 52-year-old Skilling.

In the past two years, Lay has spoken publicly in Houston to plead his innocence and promote the idea that, even though he was nominally in charge of Enron, he was unaware of the fraud being carried out by former Finance Officer Andrew Fastow.

"This business was dependent on trust and the actions of Andrew Fastow and his cohorts irreparably breached that trust," Lay said.

Fastow took a plea bargain offered by prosecutors in 2004 for a ten-year sentence in exchange for his testimony. Defense lawyers are expected to attack this main prosecution witness as being the main culprit in the Enron scandal, a man who lied to his fellow company officers as well as investors.

Jeffrey Skilling has had little to say publicly in recent months, but in testimony before Congress in February, 2002, he also sought to distance himself from the fraud that brought Enron down.

"It is my belief that Enron's failure was due to a classic run on the bank, a liquidity crisis spurred by a lack of confidence in the company," he said.

Here in Houston, Enron is still a dirty word and the memory of the pain caused by the bankruptcy of the once high-flying energy company is still fresh. More than 7,000 people lost their jobs and the retirement money that had been invested in Enron stock when the company collapsed in late 2001.

The Enron disaster led to billions of losses on Wall Street and also ended up bringing down the accounting company of Arthur Anderson that had been contracted to do the bookkeeping at Enron. The scandal also cost the life of at least one person, former vice chairman Cliff Baxter, who took his own life a few months after the collapse of the company.

Because of the climate surrounding the case in Houston, defense attorneys had asked that the trial be moved to another venue, but that request was denied. Legal analysts say that, while finding an unbiased jury may be difficult, the road ahead for the prosecution is also challenging. The fraud and conspiracy charges in the indictment may not be easy to prove to a jury of ordinary citizens with no background in corporate operations or accounting practices.

For his part, Kenneth Lay says he is hopeful that jurors will look beyond any prejudice they may have against him and look at the evidence that will presented in court. He has also called for former Enron workers who knew him to step forward and offer testimony on his behalf. The trial, once under way, is expected to last at least two months.