The Enron Task Force’s recent decision to re-indict the defendants in the Enron-related Nigerian Barge case has caused another postponement of the trial in that case.
The trial, which was scheduled to begin on either August 16 or 17th, has been pushed back by U.S. District Judge Ewing Werlein until September 20. That trial schedule would still make it the first criminal case involving former Enron executives actually to go to trial since Enron’s collapse almost three years ago.
The government decided to re-indict the defendants recently because of concern over the U.S. Supreme Court’s recent Blakely decision (prior posts here), which has called into question the Constitutionality of both state and federal sentencing guidelines, particularly in cases in which the jury did not consider the alleged loss caused by the alleged crime.
Included in the new indictment in the Nigerian Barge case are allegations that a scheme to pretend Enron sold Nigerian barges caused the loss of more than $80 million, which, if proven, would add years to a sentence under the federal sentencing guidelines.
However, I am not following the governement’s theory of the case here. Neither Enron nor Merrill Lynch lost any money on this transaction, which was a relatively small deal in Enron’s world involving about $12 million in profits for Merrill Lynch. Moreover, the alleged illegal accounting treatment for the deal was not discovered until after Enron was well into its bankruptcy case, so public disclosure of that alleged impropriety had no market impact on Enron’s already worthless stock. Accordingly, I am still trying to figure out the government’s theory that the deal caused damages of $80 million. Oh well, maybe I’ll try to ask Jamie Olis.
At any rate, defense attorneys in the Nigerian Barge case had asked for the postponement because they said new expert financial testimony is necessary and new defenses need to be developed. The government asked Judge Werlein for a bifurcated trial in which the jury hears only about the alleged crimes in the first part and then, if there is a conviction, the jury would hear evidence of sentencing factors in the second stage.