Defense lawyers remake Enron

HOUSTON — In the past four years, the name Enron has become pop-culture shorthand for an era of corporate scandals and shady accounting that followed its bankruptcy, which shook Wall Street and sent shock waves through the economy.

As lawyers mounted their defense Tuesday of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling, they cast the company as something else — a versatile energy industry pioneer that failed but stands to this day as a beacon of the free market and bold management.

And the widespread fraud? It never happened, the defense lawyers said.

Skilling lawyer Daniel Petrocelli spoke of “those beautiful glass towers” blocks from the courthouse, where Enron once kept its headquarters. Michael Ramsey acknowledged his client, Lay, took risks but asked, “Do you want a Chicken Little at the helm of a company like Enron?”

Not surprisingly, federal prosecutors told a drastically different story in opening statements at the fraud trial — one in which two executives covered up Enron’s crumbling finances while selling their stock in the company before it sought bankruptcy protection in December 2001.

“Accounting hocus-pocus,” prosecutor John Hueston of the Justice Department’s Enron Task Force said of what was really happening on Lay and Skilling’s watch. “Corporate trickery. Cooked books.”

The two tales of Enron played out for six hours before a jury of eight women and four men, kicking off what could be a four-month trial of Lay and Skilling, who are accused of fraud and conspiracy.

The first prosecution witness today is expected to be Mark Koenig, former head of Enron’s investor relations department, who worked with Lay and Skilling on quarterly conference calls with analysts. He has pleaded guilty to aiding and abetting securities fraud.