Jury selected for case against Skilling and Lay

Lake acknowledged the heavy publicity surrounding the case in the Houston area and said he did not expect jurors to “blot out” what they had seen and read, but urged them to decide based only on the evidence.

The judge also read a long list of potential witnesses in the trial, including Houston Astros owner Drayton McLane Jr. and at least two ministers. Scattered jurors recognized some of the names, but all assured the judge they could hear the case impartially despite their connections.

Lake said he would talk privately later in the day with one woman who recognized the name of one potential witness, identifying her as “my neighbor and friend.”

Jury selection occurred just blocks from the building that was once a nerve center for Enron, a Wall Street darling in the late 1990s that was considered a new-economy maverick with a high-flying stock price and a now-iconic tilted “E” logo.

But the company’s fortunes — not to mention tens of thousands of jobs and billions of dollars in investments — were shattered in 2001, as a series of complex entities designed to hide Enron debt came to light and the company went bankrupt.

“This is what we’ve been waiting for,” said David Tonsall, a former Enron pipeline worker who was one of thousands laid off when Enron crumbled in December 2001, and who watched Lay and Skilling walk into court Monday.

A federal indictment accuses Lay and Skilling of orchestrating a tangled scheme of accounting tricks designed to hide the debt, keep Enron’s credit rating high and maintain a healthy stock price, enriching themselves in the process.

Skilling faces 31 counts of fraud, conspiracy, insider trading and deceiving auditors for allegedly lying about Enron’s financial strength. Lay faces seven counts of fraud and conspiracy for perpetuating the alleged scheme after Skilling resigned in August 2001.

Lake told the jury pool the trial could take as long as four months. Among the expected witnesses is Andrew Fastow, Enron’s former chief financial officer, who pleaded guilty to conspiracy charges in 2004 and faces up to 10 years in prison once he is finished cooperating with federal prosecutors. Fifteen other former Enron executives have pleaded guilty in the accounting scandal.

Enron’s crash and the subsequent scandals roiled Wall Street, sent investors fleeing, prompted stiffened white collar penalties and raised regulatory scrutiny over publicly traded companies that spawned a slew of high-profile cases.

The collapse touched off a series of corporate scandals, and in the ensuing years the government has won convictions against Martha Stewart and other executives from companies such as WorldCom Inc. and Adelphia Communications Corp. A rare exception was HealthSouth Corp. founder Richard Scrushy, who was acquitted on fraud charges last year, even after five former finance chiefs implicated him in an earnings-boosting scheme.

MORE FROM ENRON TRIAL

Enron Trial Section Front

Ex-Enron exec gets 27-month sentence Ex-Enron exec sentenced to 2 years Lay's widow asks judge to stop seizure of condo Judge: No class action in Enron suit Judge: Enron investor suit can proceed Ex-Enron exec Causey reports to prison Ex-Enron CEO Skilling reports to prison Skilling’s jail: good food, no window bars Skilling denied bail during appeals process Two ex-Enron execs get reduced sentences Enron Trial Section Front   Add Enron Trial headlines to your news reader: