Risk & Compliance

At Enron, a Lie Is a Lie Is a Lie

Defense attorney Daniel Petrocelli hammers on David Delainey's repeated lies to co-workers, investors, and the FBI.
Stephen TaubMarch 1, 2006

Examine our Enron archive

Wednesday was cross-examination day at the trial of Kenneth Lay and Jeffrey Skilling.

In the morning session, Lay attorney Mike Ramsey spent his efforts on the plea deal of Timothy Belden, the former chief trader for Enron Corp. division Enron North America. “You’ve made a settlement where you hope, if you perform correctly and render ‘substantial assistance’…your hope and belief is a judge will accept that settlement,” Ramsey said, according to the Houston Chronicle. The former executive offered up mostly bland, pat answers; the paper described Ramsey and Belden’s exchanges as generally “dry.”

In the afternoon, however, Skilling lead attorney Daniel Petrocelli tore into David Delainey, the former chief executive officer of Enron North America. A day earlier, reported the Chronicle, prosecutor Kathryn Ruemmler finished her direct examination by asking if Enron Energy Services was “ever actually profitable from its retail operations or core business?”

“No,” Delainey reportedly replied.

On Wednesday, wrote the newspaper, Petrocelli hammered on Delainey’s repeated lies to his co-workers, to investors, and to the Federal Bureau of Investigation. The attorney reportedly asked Delainey about lying to the FBI before finally turning state’s witness in October 2003 as part of a plea deal.

“I think I said I was in denial and that I just wasn’t taking full responsibility for what I’d been part of and I was trying to protect myself,” said Delainey. Asked whether he is still trying to protect himself, he replied, “No, I’m telling the truth.”

“We’ll talk about that,” Petrocelli responded, according to the Chronicle.

In later questioning — after Delainey asserted that Skilling misled investors about the condition of Enron Energy Services, where Delainey became CEO in early 2001 — Petrocelli commented, “There’s no honor among thieves, that’s sort of the idea, correct?” according to the Chronicle.

“I guess,” was Delainey’s only reply.

At one point, Petrocelli reportedly said, “You seem to be extremely determined to get out that it was a lie, it was a lie, it was a lie.”

“It was,” answered Delainey.

“Are you nervous,” Petrocelli reportedly continued, that “if you don’t keep saying that you’ll get in trouble with the task force?” The reply: “I just want to make sure the truth comes out.” The real truth or the truth prosecutors wanted to hear, continued the attorney. The real truth, Delainey reportedly responded. And so it went.

The Chronicle also reported that former chief financial officer Andrew Fastow may take the stand next week, perhaps as early as Tuesday. Stay tuned.