Risk & Compliance

Enron Government Witness Gets Mad

Skilling's lawyer touches off a tirade about past crimes by the company's former head of investor relations.
Stephen TaubFebruary 9, 2006

Examine our Enron archive.

Bearing down on government witness Mark Koenig, the lawyers for Jeffrey Skilling and Kenneth Lay once again pressed their case that no crimes were committed at Enron.

Dan Petrocelli, Skilling’s attorney, went so far as to ask the former head of investor relations whether the charges of aiding and abetting securities fraud that Koenig had pleaded guilty to were, in fact, “pretty thin stuff,” according to The Houston Chronicle.

Koenig, the first witness in the trial, was reportedly in an angry mood. “I pled guilty as I read to you earlier and we can read it again if you want,” he was described to have snapped back. “I don’t think it’s thin or I wouldn’t have pled guilty to it.”

The paper also reported that Koenig went “on a brief tirade” about other crimes he was involved in at Enron that he didn’t plead guilty to, such as fudging earnings numbers.

“Why didn’t you plead guilty to those?” Petrocelli reportedly asked.

Answered Koenig: “I wasn’t required to.”

The paper noted that Petrocelli asked Koenig why he spent “100 to 200 hours talking to the FBI” while refusing to talk to him or Mike Ramsey, Lay’s lawyer.

Koenig asserted that he did meet with Ramsey, but when Ramsey took over, he reportedly reminded Koenig that their supposed meeting was a phone call he received from Koenig while he was still employed at Enron. “You do not mean to leave the impression with the jury that you sat down with me and cooperated with me in preparation for this trial?” Ramsey asked, according to The Chronicle, which described the lawyer as “animated.”

“No sir,” Koenig reportedly replied.

Ramsey also asked Koenig whether, before the trial, he told a close friend that he didn’t commit any crimes while at Enron. Koenig reportedly denied this.

The defense lawyers also pressed their notion that Enron’s share price was assaulted by short sellers who were trying to bring it down. For example, Petrocelli reportedly asked Koenig to read the stock prices from various dates over several months of 2001, probably to underscore the stock’s volatility.

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