At the outset of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, the Enron Task Force prosecutors estimated that it would take nine weeks to put on its case-in-chief against the defendants.

Inasmuch as that prediction assumed four days of trial time each week and that the defense would use the same amount of time on cross-examination of each witness as the prosecution used on direct, the prosecution’s prediction effectively meant that the Task Force believed that it could put on its entire case against Lay and Skilling in eighteen days of testimony.

Well, the Task Force’s prediction has pretty well gone by the wayside with its first witness, former Enron investor relations chief, Mark Koenig.

After the Task Force took two-and-a-half days on Koenig’s direct examination, the defense has used the past three-and-a-half days for cross-examination, and it now looks as if Koenig’s testimony will continue for at least another day-and-a-half, which means that the prosecution will not be in a position to present its second witness — former Enron Broadband co-CEO Ken Rice — until next Tuesday afternoon at the earliest.

Next Tuesday marks the beginning of the third week of the trial.

Moreover, when Koenig is finally through testifying, the prosecution will have used over three days of its original 36-day prediction (over 16% of its case-in-chief) on examination of Koenig.

There is no way that the testimony of Koenig — who is primarily a background witness who was not involved in the mechanics of how Enron’s earnings and finances were evaluated — represents over 16% of the prosecution’s case-in-chief.

This is shaping up to be one very long slog.

The NY Times Alexei Barrionuevo, who is writing some of the best background pieces in connection with the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, profiles former Enron Broadband CEO Ken Rice today, who is expected to be the prosecution’s second witness in the trial if the parties ever get done with the first witness, former Enron investor relations chief, Mark Koenig.
In addition to noting Rice’s disastrous testimony in the Enron Broadband trial last year, Barrionuevo’s piece points out the little-reported fact (mentioned earlier here) that Rice copped his plea deal after prosecutors discovered circumstantial evidence that strongly indicated that Rice engaged in insider trading shortly before Skilling’s resignation in August, 2001:

More than $9 million of [Rice’s $40.3 million in profits from Enron stock trades] came from three trades on July 13, 2001, about a month before Mr. Skilling officially resigned from Enron, according to records from the Securities and Exchange Commission, and around the same time that Mr. Skilling privately told Mr. Lay of his intention to resign, according to earlier testimony by Mark E. Koenig, Enron’s former investor relations chief.

Meanwhile, the prosecution’s decision to spend an inordinate amount of time on direct examination with Koenig appears to be backfiring. The prosecution spent almost two and a half days on direct examination of Koenig, who has now admitted on cross-examination that he really does not have much knowledge of the underlying evaluation process upon which Lay and Skilling based their public statements regarding Enron’s finances. Thus, Koenig is a quintessential witness whose knowledge is a mile wide and an inch deep, and the defense is now hammering his basis for asserting on direct that Lay and Skilling intentionally misled investors. To make matters worse for the Enron Task Force, the prosecution took so much time with Koenig on direct that it is really not in a position to object to the length of time that the defense is spending with Koenig on cross-examination.
Moreover, my old friend, Joel Androphy, blogging the Lay-Skilling trial over at KTRK-TV, observes the following about another prosecution mistake in dealing with Koenig:

The government allowed Koenig to keep $5 million to fight the civil cases and provide for his family, not the families of the victims. The plea bargain could have required Koenig to pay the maximum fine, and full restitution to the victims even if he provided influential testimony. That would have supported his credibility. Although the judge has the final say on restitution and fines, the government could have required mandatory surrender of funds. Now it looks like he could get reduced jail time and a large pension unlike most former employees. Koenig’s attorney did a commendable job.

It now appears that Rice’s testimony will not begin until Thursday of this week at the earliest, and may not even begin this week at all. Therefore, unless the prosecution pares down its case-in-chief dramatically on the fly, the prosecution’s pre-trial prediction of completing its case-in-chief in nine weeks is looking more and more like a pipe dream.

During opening arguments last week in the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, Lay defense attorney Mike Ramsey made the following observation to the jury about the Enron Task Force’s indictment against the two men:

“This is the indictment . . .[It] is 66 pages long. Someday you may be called upon — God save you — to have to read it. If you do, you’ll find it is enormously complex. I don’t blame the [prosecutors] at the table here; I think their predecessors wrote it. But with all the power and precision of the English language, it is a babbling kind of indictment [that makes it] very hard to pin down, very hard to determine what you are actually charged with. . .”

Well, it turns out that that the Task Force pretty much agrees with Ramsey’s characterization of the indictment. In this motion that showed up on the docket of the case yesterday, the Task Force requests that U.S. District Judge Sim Lake not allow the Lay-Skilling defense to use the Task Force’s indictment during cross-examination of the Task Force’s witnesses in the trial because, among other things, to do so would risk “unfair prejudice, confusion of the issues [and] misleading the jury. . . ”
Not exactly a sterling self-endorsement of the Task Force’s writing skills, would you say? ;^)
Meanwhile, after the Task Force took almost all of Monday morning to complete direct examination of its first (and relatively minor) witness, Mark Koenig, cross-examination of Koenig continues today (Chronicle/Flood – Fowler; NY Times/Barrionuevo – Evans; WaPo/Carrie Johnson).