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Plea Bargains Test the Scales of Justice
The Jury Is Out on Worth of Government Witnesses Who Have Admitted to Crimes
FINANCIAL TIMES
By Sheila McNulty
March 24, 2006

Each time the government hands an Enron fraud trial witness over for cross-examination, the defence lawyers attack his or her credibility for testifying as part of a plea agreement struck with prosecutors for a more lenient sentence.

With 16 former Enron employees having pleaded guilty to roles in the energy company's fraud and conspiracy, and few other compelling witnesses, this is a theme jurors have heard throughout the first eight weeks of the trial against Kenneth Lay and Jeffrey Skilling. Certainly, it casts doubt on such witnesses, who admit their sentence depends on how "truthful" prosecutors deem their testimony.

Nonetheless, the argument sometimes appears to be wearing thin with the jury, as note-taking stops, and jurors' focus wanders off the witness, with neck-stretching and other signs of inattention setting in.

But this week's witness presents the defence with more of a challenge. Prosecutors have granted immunity to Benjamin Glisan, serving a five-year sentence for securities fraud in connection with Enron's 2001 collapse. But his sentence will not be reduced by testifying and, unlike the others, he is not required to testify.

"That added nugget that is often used to establish bias is missing," says Jacob Frenkel, a former federal prosecutor.

"It makes him an even more compelling witness."

Mr Glisan has implicated Mr Lay and Mr Skilling, who served successively as chief executive when Enron was the US's seventh-biggest company. If convicted, the men face up to 25 years in prison on charges of conspiring to defraud Enron to enrich themselves. They have pleaded not guilty.

Mr Glisan, Enron's former treasurer, testified that Mr Skilling had backed a scheme to hide Enron losses, saying "it allowed him to circumvent the accounting rules", while "Mr Lay giggled". He added that Mr Lay lied to the public about the declining state of Enron's financial position.

Joel Androphy, partner at Berg & Androphy, says the defence can still attack Mr Glisan's truthfulness because he faces more jail time if his story does not back that of the prosecution. That is because the government could pursue perjury charges against him - the one thing against which his immunity agreement offers no protection.

"There is still a government cloud hanging over him," Mr Androphy says. "It's not as dark as the cloud for the other witnesses, but it's still a cloud."

He says attacking the witness is the defence's best bet.

Each witness has told the same story of fraud at Enron. "I don't think, at this point, you could attack the story as much as you could attack the person," Mr Androphy says. That means noting how witnesses lied in the past to conceal committing crimes they now admit.

Michael Ramsey, Mr Lay's lawyer, has mocked the witnesses as "finding the Lord when they come to a jailhouse: they never are godly people until they hear the slammer slam".

Lawyers agree it is not ideal to be presenting witnesses who admit lying in the past and have pleaded guilty to crimes.

However, since the sentencing of Jamie Olis,a relatively low-ranking executive at Dynegy, to24 years' imprisonment in connection with fraud at Enron's former cross-town rival, defence lawyers are able to imply those who pleaded guilty in the Enron case only did so fearing they could otherwise face an Olis-type sentence.

Mr Olis's sentence has since been overturned, but one witness, Ken Rice, a former Enron executive, admits: "I knew from the day that I got indicted that I was facing a lot of time, and the sentencing of the Dynegy executive simply reinforced that."

But Jacob Zamansky, a securities lawyer, notes the strategy of attacking those with plea agreements did nothing to help the defence in the trial of Bernie Ebbers, the former chief executive of WorldCom.

The testimony of Scott Sullivan, the telecoms company's former chief financial officer who entered a plea agreement with prosecutors, helped land his former boss a life sentence.

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