Following on this post from earlier this week on the closing arguments in the Enron Broadband trial, a Clear Thinkers reader offered the comments below on the closing arguments, a transcript of which is downloadable here (the pdf file is bookmarked in Adobe Acrobat for each morning and afternoon session of the arguments).
Inasmuch as the author of the following comment actually attended the closing arguments (I did not), the author’s account is different — and likely far more accurate — than mine:

The trial may have been a snoozer, but the closing arguments were not — everything but [Prosecutor Ben] Campbell’s arguments, that is.
From watching the jury, about three of the fourteen were even looking at Campbell during his three hour argument, which included such “zinger” lines as: “I’m from Iowa, and I didn’t just fall of the turnip truck, and neither did you,” and “As Jerry Maguire said, ‘Show me the money!'” That’s right, he referenced Jerry Maguire.
Defense attorneys had a better time holding the jury’s attention, Dave Angeli through power-points and videos, and Tony Canales through colorful analogy and talking directly to the jury. At the end of both attorneys’ arguments, the jury was intent and leaning forward. After Mr. Canales’s, half the jurors — and all of the defendants’ families and friends — were in tears. At some point Canales retorted, “Show me the money? How about show me the evidence!” He also showed the indictment to the jury (though the government filed a motion to keep it away from the jury) which, if you read it, is all about the Shelby BOS video, which was never shown. He then said, in reference to the supposedly damning Collins lipstick email, “you can put all the lipstick you want on this indictment, it isn’t going away.” If at this point the jury just wants relief from the drudgery of the trial, they got their wish from the defense.

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With the criminal investigation of American Insurance Group, Inc. and Berkshire Hathaway unit General Re heating up earlier this week, former AIG chairman and CEO Maurice “Hank” Greenberg made his first detailed public comments regarding the propaganda campaign that New York AG Eliot Spitzer has orchestrated against him.
Mr. Greenberg told a group of current and former AIG executives that at least one of the accounting “errors” that AIG has acknowledged subsequent to his leaving the company — the failure of AIG to expense executive compensation provided by a Greenberg-controlled company — had been thoroughly reviewed and approved by AIG’s lawyers and accountants before AIG ever approved the arrangement.

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On the day that the jury in the Enron Broadband trial began deliberations, the Enron Task Force announced that Christopher Calger, a former executive with Enron North America, had pleaded guilty to a criminal conspiracy count and agreed to cooperate with Task Force prosecutors in their investigation of a transaction that is expected to be part of the Task Force’s upcoming “legacy” criminal trial against former Enron top executives, Kenneth Lay, Jeffrey Skilling, and Richard Causey. The Department of Justice press release on the indictment is here.
The plea bargain involved a convoluted 2000 transaction known as Coyote Springs II in which the company sold some energy assets — including a turbine and an equity interest in a power plant — to another company called Avista Corp. That transaction is part of the wide-ranging indictment against Messrs. Skilling and Causey in which the Task Force alleges that Mr. Causey knew about the hidden role in the deal of LJM2, which is one of the seperate partnership entities that Andrew Fastow managed while serving as CFO of Enron. Although Mr. Causey’s name is not used in the plea deal, Mr. Calger admits that Mr. Causey had approved part of the LJM2 financial arrangement.

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Berkshire Hathaway’s decision to roll over and provide government investigators anything they want in connection with the multiple investigations into the transactions between Berkshire General Reinsurance Corp. and American International Group, Inc. is starting to look like a very costly one.
This Wall Street Journal ($) article reports that federal prosecutors are examining whether Joseph Brandon, chief executive of General Re and a close confidant of Berkshire’s icon, Warren Buffett, played a role in the transaction between General Re and AIG that has spawned a cottage industry of investigations into General Re, AIG, and other companies that have engaged in similar “finite risk” structured finance insurance transactions. The 46 year old Mr. Brandon — who took over as General Re’s CEO in 2001 — is the highest-ranking executive at General Re to be investigated in the matter who is still employed at General Re.
A portion of the WSJ article describing the investigation underscores the absurd length to which the government will now go in its campaign to criminalize agency costs:

The fact that Mr. Brandon learned about Gen Re’s accounting for the AIG transaction as a loan rather than insurance around the time of the conversations with Mr. Buffett may not present problems for him in the eyes of regulators, people close to the situation say. But if investigators determine that Mr. Brandon also understood the purpose of the transaction for AIG and how AIG accounted for it, he might be vulnerable to charges, the people close to the inquiries say.

Stated another way, prosecutors appear to be suggesting that if Mr. Brandon was informed that the transaction was beneficial for AIG from an accounting standpoint, then he committed a crime.
It is simply impossible to square the foregoing theory of criminal liability with the following language of Chief Justice William Rehnquist in the Supreme Court’s recent Arthur Andersen decision:

We have traditionally exercised restraint in assessing the reach of a federal criminal statute, both out of deference to the prerogatives of Congress, . . . and out of concern that “a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.”

Former WorldCom CEO 63 year old Bernard J. Ebbers received a 25 year sentence for his conviction on charges of securities fraud, conspiracy and seven counts of filing false reports with regulators relating to an a multi-billion accounting fraud that resulted in the bankruptcy of WorldCom. Here are the previous posts on the Ebbers case.
Meanwhile, former mid-level Dynegy executive Jamie Olis continues to serve a 24 year sentence even though the market loss (if any) attibutable to the accounting project on which he worked is a fraction of that which occurred in regard to WorldCom. Indeed, Mr. Olis continues to serve his sentence despite the fact that the prosecution’s market loss argument in his case contradicted the Justice Department’s position on market loss that the U.S. Supreme Court adopted in Dura Pharmaceuticals v. Broudo. Similarly, the government continues to defend an appeal of Frank Quattrone’s conviction for witness tampering even after the Supreme Court strikes down Arthur Andersen’s conviction on the same charges under similar circumstances.
Finally, Daniel Bayly is scheduled to report to prison tomorrow and William Fuhs will likely do so in the near future, while Theodore Sihpol goes home (at least for the time being), John and Timothy Rigas are allowed to remain free pending appeal of their convictions for looting their company, Richard Scrushy continues teaching his Sunday school class, and Gary Winnick counts his millions.
Folks, these highly disparate results are not the product of a rational deployment of our criminal justice system. And as Professor Ribstein points out, the Ebbers sentence is worse than any wrong that he committed. Ellen Podgor has these thoughts along the same lines.