Enron Defense Rests

Enron founder Kenneth Lay walks to the courthouse for day 53 of his fraud and conspiracy trial Monday, May 8, 2006, in Houston. (AP Photo/Pat Sullivan)
AP Photo/Pat Sullivan
The defense rested Monday in the fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling, bringing the former corporate celebrities closer to the end of their 15-week trial.

Both defendants testified as part of a 29-witness lineup. The government called 22 witnesses in its main case, which rested March 28.

Prosecutors aim to present a string of rebuttal witnesses to further reinforce their contention that Lay and Skilling committed crimes at the disgraced energy giant before it careened into bankruptcy protection in December 2001.

Deliberations could start as early as May 17, CBS News reports.

The stars among the defense witnesses were clearly Lay and Skilling. As expected, both adhered to their stance that no fraud occurred at Enron, they did nothing wrong, and a lethal combination of bad press in a skittish post-Sept. 11 market sapped market confidence and sank the company.

The government contends Lay and Skilling repeatedly lied by spouting false optimism about Enron's strength when they allegedly knew accounting tricks propped up a facade of success.

The prosecution lacked obvious smoking guns pointing to the defendants' guilt. The defense was equally lacking in tangible evidence, relying heavily on Lay and Skilling in a credibility battle of who jurors should believe — the defendants or government witnesses.

Observers expected Skilling to be temperamental in keeping with his reputation, but he was largely civil despite a few flare-ups with a prosecutor. But Lay shed his diplomatic persona, trying to control his own attorney and bristling with unbridled anger at a prosecutor who dared to question his honesty.

Lay insisted during six days of testimony that he told the truth when he praised Enron's strength to employees and investors throughout the fall of 2001 when the company was spiraling.

But on cross-examination Lay was bombarded with a slew of written warnings about Enron's accounting integrity that he received from various employees. Lay admitted he did not investigate the complaints, saying he was too busy trying to save the company.

Lay also defended how he tapped Enron for more than $70 million throughout 2001, even as the company cratered. He repaid most of those company loans with Enron stock. He didn't disclose those sales publicly because regulations at the time didn't require him to do so until 2002.

However, prosecutors sought to show he furthered an illusion that Enron was strong in the fall of 2001 by telling employees he bought stock — a fraction of what he sold back to the company — encouraged workers to buy shares as well.