Lay's Defense Is As Big As Texas

Attorney Mike Ramsey waves to the media as he leads his client, Enron founder Ken Lay from the federal courthouse, Tuesday, Jan. 31, 2006, in Houston. Lay and former Enron CEO Jeff Skilling are facing fraud and conspiracy charges. (AP Photo/Matt Slocum)
Attorney Andrew Cohen analyzes legal issues for CBS News and He is presently in Houston observing the Enron trial.

Michael Ramsey, the attorney leading the defense for former Enron chief Kenneth Lay, talks like he has a bag of marbles in his mouth. He mumbles. He stumbles. He hems and haws. He sounds like old-school Texas, through and through, and that, in essence, is what the Lay defense is offering jurors in this corporate fraud and conspiracy case. The man President George W. Bush called "Kenny Boy" may ultimately have messed up big with Enron (and Houston), the theory goes, but his heart was in the right place and his many good deeds ought now to count for something, if not in the minds of jurors than certainly in their hearts.

Ramsey's presentation was markedly different from either the government's opening statement or the opening remarks offered by co-defendant Jeffrey Skilling's attorney, Daniel Petrocelli. Whereas Petrocelli was as edgy and cocksure as his own client, Ramsey was as folksy and as down-home as Lay would like the world to believe he is. One was fire, the other ice. One made you think of "Law and Order," the other made you think of "Hee Haw." Lay's attorney talked to jurors Texan-to-Texan in a way that the other two attorneys who shared Tuesday's stage did not. How often these days does a lawyer stand up in court and, describing the fall of a company's stock price, say: "What happened was the odor of the wolf got into the flock, and the flock stampeded." Yet that's precisely what Ramsey said as though he were talking to his neighbors over a water trough.

Contrary to what federal prosecutor John C. Hueston had told jurors earlier Tuesday, Ramsey told the panel that Lay didn't hide Enron's failings as part of grand fraudulent scheme but rather disclosed them often in ways large (to analysts and investors) and small (in written disclosures hidden in voluminous securities' reports). There was no conspiracy or cover up, Ramsey said, just a bad corporate situation that got worse and, ultimately, out of control before Lay, Skilling and the other big dogs at Enron could do anything about it. Failing is not a crime, Ramsey told the jury, and neither is going bankrupt. So "why are we here?" Ramsey kept asking rhetorically as the afternoon wore on.

We're here, remember, because federal prosecutors say that Lay and Skiling participated in a massive scheme that allowed Enron to cover up its losses in order to keep inflated its stock price in order to allow the men, and others, to rake in big dough — at the expense of their employees, investors, the market and the truth. We're here because the government alleges that Lay and Skilling were playing the roles of snake-oil salesman in public long after they were dumping their Enron shares in private. But Ramsey said that these optimistic statements are part of a good executive's job function. You don't want "a chicken little" running a big company, do you?, he asked the panel.

Like Petrocelli before him, Ramsey promised that his client would take the witness stand. And he also told jurors that the defense wants the panel to see all of the tapes, all of the documents, and all of the reports that describe the company's financial status during Enron's rocky past. The government, Ramsey claimed, was cherry-picking certain passages and sound bytes here and there in the vast material to weave a story that just isn't supported by the context contained in the rest of the materials. No surprise here, really. Defense attorneys almost always want jurors to get enmeshed in the details of stories and events. Details lead to debates during deliberations and debates can lead to reasonable doubt. So when Ramsey told jurors that this is "a case that has got to do with accounting because they are saying we lied about our accounting" he was really warning them that Skilling and Lay and Co. intend to give these folks a crash course in the rules that govern the corporate books.