Originally published February 15 2006
Enron execs look to shift blame onto subordinates in upcoming trial
by Mike Adams, the Health Ranger, NaturalNews Editor
CNNmoney.com assesses the prospects of the attorneys seeking to bring down Kenneth Lay and Jeffrey Skilling, Enron's two chiefs.
In this context, their attorneys may suggest, the defendants believed they had discovered a legitimate business model that relied heavily upon the use of extremely complex, structured finance transactions that, in hindsight, may have proved unsound.
Though such a defense might seem preposterous at first, its validity for defendant Lay has already been largely conceded by the government.
Lay's alleged criminal wrongdoing, according to the indictment, is confined almost entirely to the very waning moments of the Enron debacle, by which point Enron's fate was all but sealed.
Though founder Lay was chairman and CEO from 1986 through February 2001, Skilling effectively began running the company in January 1997, when he became president and chief operating officer.
By that point Enron's once-highflying stock had already lost half its value, its accounting wizardry was self-destructing and credit agencies were weighing whether to downgrade the company's debt to junk status (a fatal blow for a trading company).
Formally, the first count of the indictment does charge both Skilling and Lay with involvement in a single overarching conspiracy, lasting from late 1999 to December 2001, to commit wire fraud and securities fraud by unfairly representing Enron's true financial condition to investors, the U.S. Securities and Exchange Commission, stock analysts and credit-rating agencies.
Many of them involved end-of-the-quarter "sales" of assets to partnerships that were treated for accounting purposes as if they were independent companies, even though they were effectively being run by Enron's own CFO, Fastow.
The indictment charges him with additional criminal schemes that have nothing to do with Fastow.
Skilling led, for instance, a structural reorganization during the first quarter of 2001 that was allegedly designed to conceal from the public enormous losses at a ballyhooed retail unit.
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