This Mary Flood/Chronicle article reports that U.S. District Judge Sim Lake has scheduled a hearing in the Enron Task Force’s legacy case against former key Enron executives Ken Lay, Jeff Skilling and Richard Causey over the defendants’ allegations that the Task Force has engaged in wide-ranging witness intimidation in an effort to suppress exculpatory testimony in favor of the defendants, whose criminal trial is scheduled to commence in less than two months.
Ms. Flood reports that Judge Lake has ordered two Houston criminal defense attorneys and four of their clients to testify in the hearing. The two attorneys are Bob Sussman and Wendell Odom, and one of the client that will be called is Larry Lawyer, a former mid-level Enron executive who previously pled guilty under a cooperation agreement to a tax-related charge arising from a payment that he received in connection with one of former Enron CFO Andy Fastow’s infamous deals in which Fastow and several of his Enron associates enriched themselves.
The witness intimidation issue has been festering throughout both of the prior Enron-related criminal trials. It first arose in connection with the trial of the Nigerian Barge case in which the Task Force effectively suppressed exculpatory testimony for the defendants in that case by fingering as unindicted co-conspirators dozens of former Enron and Merrill Lynch executives who were involved in the transaction that was the basis of the prosecution. Every one of the unindicted co-conspirators declined to testify in the Nigerian Barge trial on the basis of their Fifth Amendment privilege against self-incrimination. Consequently, four Merrill Lynch executives are serving prison sentences without having had the opportunity to present substantial amounts of exculpatory testimony and related evidence to the jury.

Then, as noted in this earlier post, the witness intimidation issue boiled over in public during the trial of the Enron Broadband case when former Enron Broadband engineer Lawrence Ciscon dramatically testified that Enron Task Force prosecutors had repeatedly threatened him and had fingered him as a target of an indictment in attempting to dissuade him from testifying on behalf of the five Enron Broadband defendants. That dramatic testimony came on the heels of the Task Force eliciting false testimony from former Enron Broadband co-CEO Ken Rice during that trial, which was then followed by the Task Force threatening another witness in connection with her testimony regarding Rice’s false testimony. As noted in this post, The Enron Broadband jury ultimately acquitted the defendants on some of the charges and could not reach a decision on the balance of the charges, resulting in re-trials of the defendants next year.
The Task Force then deployed the same tactic earlier in the Lay-Skilling-Causey case by taking the extraordinary step of naming 114 unindicted co-conspirators, which they have subsequently “reduced” to a number just under 100. That tactic — coupled with the Task Force’s control over the communications of any Enron-related defendant who has entered into a plea bargain with the Task Force — has effectively prevented defense counsel for Lay, Skilling and Causey to develop exculpatory testimony on behalf the three men. The Task Force’s control of plea bargainers’ communications and its fingering of the unprecedented number of unindicted co-conspirators prompted prominent law professor Michael Tigarto comment in connection with the Lay-Skilling-Causey motion to dismiss that “this level of silence is not normal” from witnesses and that “I have never seen defendants in a major public trial, especially a white-collar trial, so completely ostracized by witnesses with pertinent information.”
Finally, Ms. Flood also passes along that the Lay-Skilling-Causey defense team has informed the Fifth Circuit Court of Appeals that it should not jump to conclusions despite the pervasive presumption of guilt against all things related to Enron. In a letter to the Court, attorneys for Lay, Skilling and Causey asked the Fifth Circuit to delete a reference to Enron in its recent opinion reversing the long sentence in the sad case of Jamie Olis:

“It is the defendants’ position, and they believe the evidence will show at their soon-to-begin criminal trial, that the books were not cooked at Enron, that its stock was not inflated through fraudulent means, and that the company’s collapse was not caused by the alleged fraud.”

Stay tuned, for this is shaping up to be a very interesting trial.