Supreme Court hears en-Enron CEO Skilling’s appeal of fraud convictions

High court hears ex-Enron CEO Skilling’s appeal

WASHINGTON — The Supreme Court appeared troubled Monday by the selection of the jury that convicted former Enron CEO Jeffrey Skilling as well as the use of a federal fraud law against him.

Several justices appeared receptive to arguments by Skilling’s lawyer that he did not have a fair trial in Houston, Enron’s hometown, following the energy company’s 2001 collapse that cost thousands of jobs and billions of dollars.

Amid concern that the trial judge spent too little time questioning prospective jurors, Justice Stephen Breyer said, “I’m worried about a fair trial in this instance.”

Skilling was convicted in 2006 on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors. His lawyers are hoping for a new trial.

He also is contesting his conviction under the federal fraud law making it a crime to deprive shareholders or the public of “the intangible right to honest services.”

Critics say the law is vague and unfair.

Justice Antonin Scalia, the court’s most vocal critic of the law, said it sounds to him as though the law says, “It’s a crime to do any bad thing.”

But Justice Department lawyer Michael Dreeben said that Skilling betrayed the trust of Enron shareholders by lying about the health of the company and also selling a half-million shares and netting $15 million just a few months before Enron fell into bankruptcy.

Skilling “misused his official position,” Dreeben said.

Skilling’s case is one of three before the court that raise questions about the “honest services” fraud law. The other defendants are former newspaper magnate Conrad Black and former Alaska state lawmaker Bruce Weyhrauch.

Sri Srinivasan, Skilling’s Washington-based lawyer, focused much of his argument on the jury issue. Skilling sought to have the trial moved out of Houston, but the judge turned him down, and a federal appeals court backed that decision.

Three-fifths of those initially questioned as potential jurors reported they could not set aside their prejudice or anger against Enron, or were unsure if they could, Srinivasan said.

The other key factor, he said, is that jurors would feel pressure to convict Skilling because they knew their neighbors and colleagues were expecting it.

He said the trial of Skilling and former Enron chairman Kenneth Lay, who has since died, was a rare case that needed to be moved out of Houston “because of the degree of passion and prejudice in the community.”

The judge in the trial spent five hours assembling a jury and questioned each juror for an average of 4 1/2 minutes, he said. He noted that in the death penalty trial of Oklahoma City bomber Timothy McVeigh, the case moved to Denver, and even then, putting together a jury took 18 days.

Breyer and Justice Sonia Sotomayor, the only member of the court with experience as a federal trial judge, seemed especially bothered by the questioning of one potential juror who reported that she herself lost $50,000 to $60,000 in the Enron debacle.

The judge did not immediately disqualify her. Indeed, Skilling’s lawyers used one of their limited challenges to make sure she did not become a juror.

“How can we be satisfied that a fair and impartial jury was picked when the judge doesn’t follow up when the witness said, ‘I’m a victim of this crime,’” Sotomayor asked.

Dreeben insisted the trial was fair, pointing out the judge had more than 15 years of experience picking juries and trying cases. He also rejected comparisons to McVeigh’s trial, a capital case stemming from the death of 168 people in the bombing of the federal building in Oklahoma City.

Thirteen media companies, including The Associated Press, joined in the filing of a brief urging the high court not to rule so broadly on the jury issue that judges would take steps to restrict press coverage.

The court is expected to issue an opinion by late June.

The case is Skilling v. U.S., 08-1394.