The jury in the Enron fraud and conspiracy trial Thursday delivered guilty verdicts on all six charges against former Chairman Ken Lay and 19 out of 28 counts against former Chief Executive Officer Jeff Skilling. The two men now face possible life in prison, but attorneys for both defendants say they will appeal the convictions.
After only six days of deliberation, the Enron jury came back to the courtroom to deliver its verdicts. Ken Lay sighed deeply as the guilty verdict was read and Jeff Skilling looked down at the floor and remained silent.
Federal Prosecutor Sean Berkowitz hailed the jury's decision.
"The jury has spoken and they have sent an unmistakable message to board rooms across the country: You cannot lie to shareholders, you cannot put yourselves in front of your employees interests, no matter how rich and powerful you are, you have to play by the rules," he said.
But defense lawyers do not see this as the end of their work. Jeff Skilling's attorney, Daniel Petrocelli said the jury's decision is only the beginning of another long legal battle.
"Obviously, it did not come out the way we had hoped. It does not change our view of what happened at Enron and it certainly does not change our view of Jeff Skilling's innocence," he said.
Petrocelli said he will file "a full and vigorous appeal," but he did not say on what grounds. Skilling said he was prepared to move forward with the legal fight.
"We are going to have to go back and think this thing through. Obviously, we are disappointed, but that is the way the system works," said Mr. Skilling.
In the four-month long trial, Lay and Skilling claimed they knew nothing of the fraudulent financial schemes being carried out inside Enron. They blamed former Chief Finance Officer Andrew Fastow for the fraud and blamed the downfall of Enron on a panicked market, driven by negative articles in such publications as Fortune Magazine and the Wall Street Journal.
Speaking to reporters after they had appeared in court, jurors said they did not accept that defense. They said Fastow and other former executives who testified under plea bargain agreements with the government told a consistent story about what had happened and that the Lay and Skilling defense did not hold up under scrutiny.
One juror, who said he was a school principal, gave the defendants a failing grade.
"I cannot say that I do not know what my teachers are doing in the classroom," he explained. "I am still responsible if a child gets lost. I did get a phone call from school while I was here serving on the jury, because they are looking for the principal. So to say that you did not know what was going on in your company is not the right thing."
The jury's work in this case is now over and the sentencing task will be carried out by the federal judge who presided over the trial, Judge Sim Lake. He has a great deal of discretion under federal guidelines and could sentence the defendants to as little as probation on some counts, but could also impose lengthy prison sentences that would effectively keep both Lay and Skilling in prison for the rest of their lives.
Both men are free on bond for the time being, but the judge ordered both to turn over their passports in order to prevent them from leaving the country.
Former Enron employees, who lost their jobs and pensions when the company collapsed in late 2001, rejoiced Thursday. Many of them came to the courthouse downtown to express their satisfaction with the outcome of the trial.
Enron was at one time the seventh largest US corporation and its demise shook confidence in the US stock market at a time when investors were still reeling from the terrorist attacks of September 11, 2001. It was also the first in a string of highly publicized corporate scandals in which high-ranking executives were charged with fraudulent accounting schemes.