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In a high-volume, passionate argument, defense attorney Daniel Petrocelli implored jurors to find his client, former Enron Corp. Chief Executive Officer Jeffrey Skilling, not guilty of criminal charges pending against him, and argued federal prosecutors failed to prove Skilling participated in a conspiracy to engage in fraud. Petrocelli, who spent Tuesday morning delivering his closing argument for Skilling, told the jury the federal prosecutors on the Enron Task Force relied on suspect testimony from cooperating witnesses during the trial and failed to present documentary evidence to prove their case against Skilling. He told jurors they need more than the word of prosecutors to find Skilling guilty of the criminal charges against him. “No matter how many times you say fraud, it doesn’t make it true. There has to be facts. It’s not about argument,” Petrocelli, a partner in O’Melveny & Myers in Century City, Calif., said during more than three hours of argument. Bruce Collins, a defense lawyer for Skilling’s co-defendant, former Enron Chairman Kenneth Lay, echoed Petrocelli’s theme, telling jurors the government failed to prove a conspiracy involving Lay. The first count in the indictment against the two high-profile executives charges Lay and Skilling with conspiring to commit wire and securities fraud at Enron. “There was no conspiracy. There was no effort to hide problems. This was business as usual,” Collins, a partner in Carrington, Coleman, Sloman & Blumenthal in Dallas, argued Tuesday afternoon. Collins cautioned jurors against assuming Enron filed bankruptcy in December 2001 because of fraud. He also told jurors that to find Lay guilty of the criminal charges against him, they must be convinced Lay abandoned all the principles he lived by during a long, successful business career “and in three months — less than you’ve spent in this jury box — he became a greedy conniving liar.” Collins was referring to the time period between Aug. 14, 2001, when Lay stepped back into the CEO job after Skilling resigned, and December 2001 when Enron filed for bankruptcy. Collins, who began his arguments after the lunch break on Tuesday, is the first of four defense lawyers for Lay who will participate in the closing arguments. Petrocelli, Skilling’s lawyer, argued all morning, taking up about 3 1/2 of the six hours allotted to the defense for closing arguments. Petrocelli told jurors to look into Skilling’s soul to see if the former Enron CEO is a criminal. “See if you see a criminal. See if you see a man with criminal intent. See if you see a man who has been accused of spearheading a massive criminal conspiracy, the likes of which has never been seen before, involving countless people, billions of dollars, and he’s supposedly the mastermind,” Petrocelli said. Today, after Sean Berkowitz, director of the Enron Task Force, concludes the prosecution’s closing argument in the highly watched criminal trial, the 12-member jury that has been hearing testimony for nearly four months in U.S. District Judge Sim Lake’s Houston courtroom will begin deliberations. Prosecutors allege Skilling and Lay participated in a conspiracy to misrepresent the true financial condition of Enron, but the defendants have blamed Enron’s problems on criminal acts by former Enron Chief Financial Officer Andrew Fastow, who pleaded guilty to two criminal charges and agreed to a 10-year prison sentence. Skilling faces 28 criminal charges of fraud, conspiracy, making false statements and insider trading. Lay faces six conspiracy and fraud charges in the trial in United States v. Jeffrey K. Skilling, et al. Lay and Skilling have pleaded not guilty. Closing arguments began on Monday when prosecutor Kathryn Ruemmler, an Assistant U.S. Attorney, told jurors Lay and Skilling used accounting tricks, fiction, trickery, half truths, omissions and outright lies to paint a dramatically distorted picture of Enron’s financial condition. She said their goal was to keep Enron’s stock price high. But Petrocelli told jurors on Tuesday that if they can’t, without hesitation, pinpoint the beginning of a conspiracy at Enron, they must acquit Skilling. “If you hesitated, that’s reasonable doubt. We own that. We win. That’s acquittal right there if you hesitated,” he said. Petrocelli suggested that many of the witnesses who testified during the trial, who had cooperation agreements with the government, may not have been entirely truthful on the witness stand because prosecutors pressured them to take plea deals. Petrocelli poked fun at the concept of “bear hugs,” a term former CFO Fastow used last month in testimony describing the side deals he had with Enron in connection to the LJM partnerships, the off-balance-sheet partnerships he ran. Fastow, who was a government witness with a cooperation agreement, testified that Skilling gave him oral assurance that the LJM partnerships would not lose money on some of their investments with Enron. “You heard that. A bear hug here. A bear hug there. A rejected bear hug,” Petrocelli said. “This is not a petting zoo. This is a criminal case.” Petrocelli said the government is trying to put Skilling in jail based on these so-called bear hugs Fastow described during his testimony, but prosecutors came up with no documentary proof. “There is not a single piece of paper on the planet … that says Jeff Skilling gave any kind of guarantee, let alone a bear hug. What they want you to do is assume there was a guarantee,” Petrocelli said. The defense attorney told jurors the government could have bolstered its case by putting former Chief Accounting Officer Richard Causey on the witness stand to corroborate Fastow’s testimony that the side deals with Enron were memorialized in a document known as the “global galactic agreement.” However, Petrocelli pointed out, the government failed to call Causey as a witness. Fastow testified Causey initialed the handwritten global galactic agreement and got it approved by Skilling. Causey was named in the indictment along with Skilling and Lay, but Causey struck a deal with prosecutors and pleaded guilty to securities fraud in December 2005. Petrocelli told jurors he has no clue if the global galactic agreement is legitimate: “Jeff never saw it. His initials aren’t on it. I don’t know if Rick Causey signed that thing or not, but I tell you one thing, they could have easily put that thing to rest by bringing him to testify.” Petrocelli told jurors the prosecutors failed to prove with documents that Skilling told anyone at Enron to adjust earnings reports to meet or exceed earnings targets. He also said they didn’t prove Skilling engaged in insider trading. The indictment brings 10 insider-trading charges against Skilling in connection with Enron stock he sold in 2000 and 2001, including the sale of 500,000 shares of stock on Sept. 17, 2001, at a profit of nearly $16 million. Petrocelli pointed out that Skilling had been gone from the company for a month before he sold that stock and said it’s not unusual for executives to sell stock holdings after they leave a corporation. In wrapping up his closing argument, Petrocelli asked jurors to read the jury instruction on reasonable doubt. “It says if you hesitate, there’s reasonable doubt. … If you have any hesitation at all about him, if you do, he must be acquitted,” Petrocelli said. “This is a criminal trial, and a man’s life is on the line. Don’t compromise in there. Don’t negotiate with his life. Not guilty. Not guilty. Twenty-eight times,” he said. Collins’ concluded his argument on behalf of Lay shortly before 3 p.m. on Tuesday, and others on Lay’s defense team — Houston solo practitioners Michael Ramsey and Chip Lewis and George “Mac” Secrest, a partner in Bennett & Secrest in Houston — each were expected to make their closing arguments after Collins. Collins left jurors with the argument that Enron failed because of a “crisis of confidence” in the market. “Do not assume that the collapse means fraud. The collapse of Enron is zero evidence of fraud,” he said. “Put the government to the burden of proving the allegations they actually make in the indictment.”

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