Watch CBSN Live

Impassioned Plea At Enron Trial

Witnesses who testified against former Enron Corp. CEO Jeffrey Skilling were "robbed of their free will" by prosecutors, suggesting they were eager to tell the government what it wanted to hear, Skilling's defense attorney said Tuesday.

Daniel Petrocelli, delivering an impassioned closing argument in the fraud and conspiracy trial of Skilling and Enron founder Kenneth Lay, also denied again that the men perpetuated an overarching fraud at the company.

Petrocelli blasted prosecutors for what he called their incredible shrinking case, failing to prove conspiracy or fraud and cutting deals with former Enron executives to go after the prize, as he referred to Skilling, reports CBS News correspondent Cami McCormick. He said what is on trial is fear — the fear those former executives had of long prison sentences if they did not cooperate with the government.

Defense lawyers have suggested throughout the trial that most of the eight former Enron executives who struck plea deals with prosecutors admitted to crimes they did not commit, partly in hopes of avoiding expensive legal battles or lengthy prison terms.

"They know what needs to be said to make this work, get through it, get out of that courtroom and get home and move on with their lives," Petrocelli told the jury of eight women and four men.

"You bet I'm passionate. And you bet I'm indignant. I'm representing a man falsely accused and on trial for his life. Who wouldn't be indignant?" Petrocelli said.

Speaking softly, Petrocelli told the jurors he was somewhat nervous because he had had "Jeff's life in my hands" for two years and would soon turn it over to the jury, which is expected to begin deliberations on Wednesday.

"Look into his eyes. Look into his soul. See if you see a criminal. See if you see a man with criminal intent," Petrocelli said of his client.

The defense lawyer also suggested prosecutors had rewritten history in the courtroom: "You can say fraud to your heart's content. No matter how many times you say fraud, it does not make it true. There have to be facts, folks."

Before breaking for lunch, Petrocelli told the jury "a man's life is on the line" and repeated "not guilty, not guilty, not guilty" — 28 times, once for each of the charges Skilling faces.

Defense lawyers for Lay were to present their closing argument later Tuesday.

On Monday, a federal prosecutor told jurors Lay embodied the top-down view that he and Skilling were immune to rules that govern others during his contentious testimony in the pair's fraud and conspiracy trial.

Prosecutor Kathryn Ruemmler on Monday displayed for jurors what she called a telling quote from Lay: "Rules are important, but they should not ... you should not be a slave to the rules, either."

She said neither man was a slave to rules as both committed crimes "through accounting tricks, fiction, hocus-pocus, trickery, misleading statements, half-truths, omissions and outright lies."

She beseeched the jury to convict the pair of all charges against them, saying they "lied over and over and over again" and "bent rules, pushed rules and then pushed over the line" in the years before Enron sought bankruptcy protection in December 2001.

Ruemmler said Lay and Skilling repeatedly lied to pump up Enron's stock price and win adoration from Wall Street and their peers.

But the stock price fell steadily throughout 2001. Skilling abruptly resigned in mid-August that year after only six months as CEO, leaving Lay to resume the role along with serving as chairman.

At that juncture, both men could have told investors that the company's broadband unit had failed, the retail energy business was awash in losses, financial structures designed to lock in gains from assets and investments were crumbling, and asset values were overblown, Ruemmler said. Instead, both assured Wall Street and investors that Enron was in the best shape ever.

"They chose to lie," she said.

Ruemmler said both men chose not to probe unusual financial structures or conflicts of interest. Jurors will be able to consider whether the defendants deliberately avoided learning bad news, though Ruemmler pressed that option more with Lay than Skilling.

"Over and over and over again, Mr. Lay chose not to ask hard questions. The law says you can't do that. You cannot escape liability by putting your head in the sand," she said.

Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors related to his activities from 1999 to August 2001. Lay faces six counts of fraud and conspiracy stemming mostly from the period after he resumed as CEO upon Skilling's departure.

On Thursday, Lay will be on trial again — before U.S. District Judge Sim Lake, but without a jury — in a case related to his personal banking. In that case, the government contends Lay obtained $75 million in loans from three banks from 1999 through 2001 and reneged on agreements not to use the money to carry or buy margin stock. He is charged with one count of bank fraud and three counts of making false statements to banks in the case.

Lake plans to issue his verdict in the banking case, which is expected to last several days, after jurors in the larger conspiracy case render theirs.