The Washington Post

By Carrie Johnson

February 10, 2006

HOUSTON, Feb. 9 -- Defense lawyers attacked the guilty plea of a former Enron Corp. executive Thursday, calling the deal "pretty thin stuff" in an effort to advance their argument that witnesses had been intimidated into cooperating with the government.

"I don't think it's thin, or I wouldn't have pled guilty to it," Mark E. Koenig said of his August 2004 plea to a single count of aiding and abetting securities fraud.

Without prompting, Koenig then reminded jurors of previous testimony in which he described efforts by the company to meet or exceed Wall Street targets by two pennies in 2000, more than two weeks after the fiscal quarter closed.

"Frankly, I was afraid these things would come back to me for years," Koenig said of misleading statements he made to analysts about the health of one of Enron's units. He faces as much as 10 years in prison when he is sentenced.

The exchanges punctuated another long day in which the eight-woman, four-man jury heard audiotapes and videotapes of stock analyst calls and employee meetings in which Skilling and Lay gave largely optimistic assessments of Enron's finances in the months before its filing for bankruptcy protection.

Both defendants argue that the company collapsed in a "panic" and that the vast majority of 16 former executives who pleaded guilty did so to preserve money for their families and to escape long prison sentences. Skilling and Lay, who say they are not guilty, could spend the rest of their lives in prison if they are convicted on fraud and conspiracy charges.

Michael Ramsey, lead defense lawyer for Lay, urged Koenig to answer only the questions he was asked. Ramsey confronted the witness about statements he allegedly made to a close friend and former Enron employee who Ramsey said indicated that Koenig did not think he had engaged in wrongdoing at Enron. Koenig called the woman, who is not on the defense witness list, a "dear friend" but said the account was wrong. Defense lawyers could later seek to call her to rebut his testimony.

Ramsey spent most of the afternoon seeking to explore "clues relative to the sudden death of Enron." But U.S. District Judge Simeon T. Lake III affirmed most objections by Assistant U.S. Attorney Kathryn H. Ruemmler and headed Ramsey away from that line of questioning.

"I'm allowing you to question this witness," the judge told Ramsey. "I'm not allowing you to argue your case in the guise of questioning this witness."

Ramsey gained more ground when he attempted to portray Lay as less focused on details and more on leading the company's "public relations, politically oriented, diplomatically oriented" efforts before returning as chief executive upon Skilling's abrupt August 2001 departure. Lay moved in high-level political circles, meeting with Vice President Cheney about energy policy and conversing at least twice with presidential adviser Karl Rove, according to a 2001 analyst call the jury heard Thursday afternoon.

Ramsey said Lay had to "re-immerse himself" in the day-to-day operations at Enron.

Late in the day, the judge pronounced one line of questioning "a waste of time" and urged the defense to move on to other topics. Koenig is expected to return to the witness stand for most of Monday. The trial will last at least four months.