As predicted yesterday, the media frenzy over former Enron CFO Andy Fastow’s testimony relegated the previous Enron Task Force witness — former Enron Broadband chief operating officer Kevin Hannon — to obscurity rather quickly. However, before leaving the stand, the final moments of Hannon’s testimony yesterday reminded me that a lawyer should always be extra-careful about what to ask the witness during re-direct examination.
As noted here, one of the Enron Task Force’s main themes last week during the testimony of former Enron Energy Services executive David Delainey and a couple of other witnesses was that Skilling engineered a reorganization of the Enron Energy Services (“EES”) unit in a manner that hid trading losses of that unit underneath the blanket of high profits being generated by Enron’s top-flight trading unit, Enron Wholesale. During cross-examination, Skilling’s lawyers challenged Delainey and the others by suggesting that the true purpose of the reorganization was simply business efficiency — to combine EES’ poorly-performing trading operation with the better trading expertise of the Wholesale unit. Delainey, in particular, generally contested that defense contention during cross-examination.
Which leads us to the following exchange between Task Force prosecutor Cliff Stricklin and Hannon during redirect examination yesterday:
Q. And what did [Enron Wholesale CEO] Mr. Whalley, first of all, remind the jury who Mr. Whalley was at the time?
A. He was the CEO of Wholesale.
Q. And what did Mr. Whalley tell you about the rationale for Mr. Skilling moving EES into Wholesale?
A. He said he had met with Dave Delainey, who was depressed over the state of the EES business and he said we had to do something. I didn’t want Dave to quit, so we made the argument to Arthur Andersen that we should move the risk folks [from EES] into Wholesale.
Q. And why?
A. To improve the operation of EES [was] my impression.
Mr. Stricklin quickly moved on to another line of questioning, but it’s hard to downplay testimony of a prosecution witness that directly contradicts a major theme of the testimony of the prosecution’s previous witness.
Be careful what you ask on re-direct.
TK,
How come we didn’t see the truth on your website:
From the NYT:
“By June 2001, Mr. Fastow testified, Mr. Skilling and Mr. Fastow were discussing that, even with the use of the partnerships, Enron was running out of ways to keep its earnings going. At a meeting in Mr. Fastow’s office he told Mr. Skilling that he thought there were $5 billion to $7 billion of troubled assets on Enron’s balance sheet and they needed to “think of something dramatic to deal” with the situation. Enron was reporting about $1 billion in annual earnings at the time, in large part from the use of the off-books transactions, Mr. Fastow said. “I said it is going to be tough to work ourselves out of this,” Mr. Fastow testified.”
“He suggested that Enron look to do a merger, and threw out names of oil companies. Mr. Skilling shook his head and said he did not think anyone would merge with Enron. “Andy, I have hit a brick wall,” Mr. Skilling said, according to Mr. Fastow. “I just don’t know what to do.”
“Two months later, Mr. Skilling resigned from Enron, citing personal reasons.”
Are Skilling and Lay going to testify? No.
Where did you get the transcript? Are you attending the trial and making one yourself? I guess what I really want to know — where can -I- get a transcript?
Moe, the juxtaposition of your comment with DR’s request reveals a lot. DR wants to try and figure out what is really happening, being said. You simply quote the NYT as support of your opinions. What, the NYT wouldn’t print it if it wasn’t true and relevant? The NYT tends to set many folks not-so-well-thought-out agenda by letting them know what is “true and “relevant.”
You have the maddening, and intellectually suspect, tendency to quote possibly coerced/manufactured testimony to prove that that testimony wasn’t coerced/manufactured.
I once polished the shoes of ceo wholesale Mr Whalley – and he is a wally !! Was in London Millbank ,I used to go there every monday to poish the staff shoes.
I wouldnt have testified in the same situation laak.
I disagree with the statement
“they have the maddening, and intellectually suspect, tendency to quote possibly coerced/manufactured testimony to prove that that testimony wasn’t coerced/manufactured.”
Definately true!