Former Enron Execs Acquitted

enron logo
A federal court jury Wednesday acquitted three former Enron Corp. broadband executives of some charges but deadlocked on the remaining charges involving them and two other executives.

The five were on trial for their alleged roles in making the washout broadband venture appear strong to investors and Wall Street to pump up the company's stock price.

U.S. District Judge Vanessa Gilmore declined requests from attorneys to identify the nature of the jury split. She issued an order barring jurors from discussing the case, which she said would have to be retried.

Former broadband CEO Joseph Hirko was acquitted on insider trading and money laundering counts, and former strategist Scott Yeager was acquitted of conspiracy and security and wire fraud counts. In addition, software engineer Rex Shelby was acquitted of insider trading.

The jury of 10 men and two women, which deliberated four days and was considering 164 counts, also was unable to reach a verdict on any counts involving former finance chief Kevin Howard and in-house accountant Michael Krautz.

Former Enron CEO Jeffrey Skilling, set for trial in January alongside Enron founder Kenneth Lay and former chief accounting officer Richard Causey, also faces charges that he lied to Wall Street about the broadband unit's capabilities and value.

While there were no guilty verdicts, the outcome did not exonerate the five defendants.

"I feel very comfortable with the not guilty," Tony Canales, Yeager's lawyer, said. "Everybody should. The government did not get a single guilty."

"After three months, the jury didn't find guilt," Barry Pollack, Krautz's lawyer said. "That tells us something of the government's use of its resources in this case."

Federal prosecutor Cliff Stricklin implored Gilmore to order the jury to resume deliberations Thursday, saying four days of discussions was not enough given the complexity of the case and the huge amount of evidence delivered to jurors after three months of testimony.

"No doubt this case will have to be retried," he told the judge.

Gilmore said she agreed the four-day deliberation time seemed short, but she declined to bring the jury back for more talks.

Prosecutors left the courtroom without comment.

"What can you say?" said Ed Tomko, whose client, Shelby, was acquitted on four counts of insider trading, but had 16 others result in no verdict. "We're disappointed to have spent 12 weeks and an amount of money and wind up with a verdict that is confusing. It doesn't make any sense. Obviously they could not reach a unanimous verdict on most of the major counts."

The two schemes that came together in the trial that began April 18 focused on technology and finance.

On the technology side Hirko, Yeager and Shelby were accused of conspiring with others to lie to Wall Street analysts and investors about the status of Enron's broadband network and operating software so they could pocket millions of dollars from sales of hype-inflated stock.

Often tedious, technology acronym-filled testimony boiled down to what worked when and whether it was touted in future or present tense to analysts who influenced Enron's stock price at a January 2000 conference in Houston.

  • Stephen Smith

    Stephen Smith is a senior editor for