Thursday, May 25, 2006

Arrogance and the Law

The jury has spoken in the Enron case. While I did not follow it closely, I did read bits of the defendants' testimony. Each of them at one time or another showed the jury a quality in a part of their personalities that is more than deadly in a jury trial. The quality? Arrogance.

Jeff Skilling betrayed it in his attitude with his cross examiner, a relatively young Assistant US Attorney. Skilling made it clear that this young man's grasp of the business concepts used at Enron was woefully inadequate. But if Skilling was so damn smart, a juror might plausibly ask, why did Enron sink so fast with him at the helm? Irrelevant to the case, but highly relevant to turning a potentially sympathetic jury into assistant prosecutors.

Ken Lay, on the other hand, betrayed an imperious impatience with his own counsel during direct, becoming irritated when he momentarily lost his train of thought and could not grasp the gist of the question. Lay clearly wished to maintain his lordly command of the proceedings. Yet he was a defendant and his attorney was valiantly trying to help him. Again, a small point, but maybe a turning point.

This case was difficult enough for the defense. The public generally wants someone to be legally responsible for a corporat failure of the magnitude of the Enron debacle. This seems to be par for the course. The defense must find a way to turn the jury's sympathies to its client in some way or it is toast. When the defendants themselves become unsympathetic as people, the defense becomes burnt toast. Bitter and charred.


Eric said...

There's something to that. Even if those guys were innocent, they blew it.

Rick Ballard said...

I wonder how Keller, Risen and Lichblau will come off on the stand?

If a client doesn't think enough of his attorney to pay attention to what he's told then I don't have much sympathy for him.

buddy larsen said...

Right--they oversold themselves not only to investors, but to their own employees--for whom "caveat emptor" isn't such a stark warning--and hurt a lot of folks pretty badly. So let 'em do some time. Set an example.

vnjagvet said...


I hope we get to see their performances.

Clients like these literally pay millions for defense.

They either take advice they pay for or they don't. You are right that those who don't deserve the consequences of their actions. I wonder if they have hired a consultant to determine how they might look in orange?

loner said...

In the Spring of 1984, I, never an investor in other than retirement funds, had my one brush with insider trading when a college roommate moved in with me when he and his first wife separated. I didn't inquire as to where he was getting his info on Houston Natural Gas, but I thought it strange that he would have such info (I heard one mention of insider trading rumors on FNN,) and I remembered.

When Enron collapsed I thought I'd do a quick check and see what had become of Houston Natural Gas. It turned out that:

In June 1984, he [Ken Lay] joined Houston Natural Gas as chairman/CEO. Houston Natural Gas merged with InterNorth, Inc., in July 1985 to become Enron Corp., and he was named chairman/CEO of Enron in February 1986.

My guess is that they'd been getting away with doing whatever they chose for so long that it never occurred to them that they'd not get away with this.

"Hypocrisy, arrogance, pride, anger, harshness, and ignorance; these are the marks of those who are born with demonic qualities, O Arjuna."

Bhagavad Gita

buddy larsen said...

SarBox is hurting a lot of smaller enterprises trying to grow into public companies--the costs of the reporting requirements and all--and driving others to set up overseas. But it's rough trade for needed transparency. Hope a middle ground can be found. There's talk in congress.

Great snip from the Bhagavad Gita, Loner.