They stand together against the world: the poster boys of corporate malfeasance, the yin-and-yang former chief executive officers of Enron finally coming to trial in a drab federal courtroom in downtown Houston.
But in truth, Ken Lay and Jeff Skilling never much cared for one another. The charming Lay wasn’t comfortable with Skilling’s sharp edges; the brainy Skilling considered Lay a lightweight glad-hander. And each has, at various points, sought to cast some measure of blame on the other for the 2001 bankruptcy of what was once the seventh-largest company in America – an implosion that wiped out 4,500 jobs and $70bn (£39bn, E58bn) of investors’ money while Lay, Skilling, and other top executives walked away with hundreds of millions of dollars.
Since that time, a SWAT team of prosecutors, FBI agents, and other experts have been trying to answer the question: whose fault was it? So far they have charged 34 defendants and obtained 16 guilty pleas – including those from several key former Enron executives.
But all that was prelude to the trial of Lay, 63, and Skilling, 52, which is set to begin on 30 January. The two men who were never friends are now locked together in deep mutual need – if convicted, the pair, once widely acclaimed as visionaries, could spend the rest of their lives behind bars.
The trial, which may last into the summer, will be a critical event in American business history. The investigation has been the most exhaustive examination of a corporate crime scene ever conducted, and it is Enron – not Tyco, not WorldCom, not Martha Stewart – that has come to stand as shorthand for everything that went wrong in corporate America. The verdict will send a clear message about the accountability – or lack thereof – of those at the very top of a company. With only a modicum of hyperbole, Skilling’s lead lawyer, Daniel Petrocelli, calls the impending showdown the “most important, most high-profile, most must-win case that [the US government] has ever prosecuted.”
For Lay and Skilling, there is even more at stake than guilt or innocence. They are seeking not just acquittal but public redemption. In most criminal trials the prosecution and defence have divergent views of reality, but in this case the difference is extreme: Lay and Skilling will argue not just that they weren’t hiding anything, but that there was nothing to hide. In an extraordinary speech last month, Lay declared that Enron was a “strong, profitable, growing company”–a “great company”–even into the fourth quarter of 2001. Enron, the two men say, was brought down by the actions of a rogue officer–former chief finncial officer Andrew Fastow, who has already pleaded guilty.