Skilling, Lay allege prosecutorial misconduct

HOUSTON — Lawyers for Enron Corp. founder Kenneth Lay and former CEO Jeffrey Skilling say “deliberate, systematic prosecutorial misconduct” has choked their efforts to prepare for trial in January.

Lay, Skilling and the third defendant in their case, former top Enron accountant Richard Causey, say obvious or veiled threats from prosecutors that dozens of witnesses may be indicted or, if they have pleaded guilty to crimes, face harsh prison sentences if they talk to the former executives has shut off critical information sources.

Daniel Petrocelli, Skilling’s lead trial lawyer, said the defense teams have whittled that list to 38 particularly crucial witnesses who have consistently refused to talk to them.

Lay’s lawyer, Michael Ramsey, told U.S. District Judge Sim Lake in a hearing Thursday that the defense teams have seen a “pervasive freeze-up of witnesses,” though he acknowledged out of court that it was possible at least some just don’t want to help his client or the others.

The trio wants to dismiss the sprawling case against them on grounds that the Justice Department’s Enron Task Force “has engaged in deliberate, systematic prosecutorial misconduct that has irreparably harmed defendants’ ability to prepare for trial,” according to a court filing made public this week.

But while awaiting Lake’s ruling on that request, the trio wants the judge to compel those witnesses to appear in court later this month so Lake can assure them that they can talk to the defendants about the case and testify on their behalf without fear of government reprisal.

Lake said Thursday that such a move could embarrass potential witnesses forced to appear in open court and therefore be counterproductive. He said instead he would send letters to attorneys for the 38 witnesses reiterating that they are free to talk to the defense teams without fear.

Petrocelli said he didn’t think the letters would help, particularly since the defense lawyers had sent witnesses a copy of Lake’s May order advising witnesses that they could meet with one or more defendants and their lawyers with no worries of government repercussions.

Instead, he said Lake could order prosecutors to require those witnesses to talk to the defense teams. Lake declined.