Long-Awaited Enron Trial Begins

A federal judge told a group of potential jurors that their job was not to seek vengeance against Enron Corp. founder Kenneth Lay and former CEO Jeffrey Skilling as jury selection began on Monday in the premier criminal trial to emerge from the biggest corporate scandal in recent years.

Lay and Skilling arrived at a federal courthouse in Houston, looking relaxed and ready for the selection process, which could prove difficult in a city where thousands lost their jobs because of Enron's collapse.

"We're looking forward to it. We're ready," said Daniel Petrocelli, Skilling's lead trial lawyer. Skilling declined comment, as did Lay, who simply said, "Fine, how are you?" when a reporter asked how he felt.

Asked if he believed a fair jury could be found in Houston, Petrocelli said: "I'm sure hopeful that we can." Last week a flurry of defense efforts failed to move the trial elsewhere to escape a potentially hostile jury pool.

CBS News correspondent Lee Cowan reports U.S. District Judge Sim Lake started this morning's proceedings off greeting more than a hundred potential members of the jury, telling them in no uncertain terms that "this will be one of the most interesting and important cases ever tried."

The question: Can they find 16 people who haven't already formed an opinion about one of the most highly publicized cases in history? Registered voters in Houston were sent a mammoth 14-page questionnaire, containing 77 questions with multiple subparts, asking their opinion about the case. That's the basis the judge is working off today, and it is he, not the attorneys who will be questioning the potential jurors further.

What's he looking for? In his words: "What I mean by a fair and impartial jurors is a juror who will base his or her decisions solely on the evidence admitted during this trial and who will follow my instructions concerning the law."

Many expressed concern that they knew some of the potential witnesses in the case; at least two are pastors of local churches here where prospective jurors worship every Sunday. Despite that, they maintained they could still be fair and impartial if those men take the stand.

The judge hopes to complete jury selection by the end of the day.

Lake told the pool that the jury box was no place for anyone seeking vengeance.

"We are not looking for people who want to right a wrong or provide remedies for those who suffered from the collapse of Enron," he said.

When the judge asked if any jurors "view this as an opportunity to strike a blow for justice," no one raised a hand.
Enron Corp. was once the nation's seventh-largest company, considered an innovative, new-economy maverick and admired as a top stock performer.

After a spectacular collapse that left thousands jobless and slammed Wall Street with billions in losses, Lay, 63, and Skilling, 52, are to be tried in a federal courthouse only a few blocks from the firm's former headquarters with its swiveling "E" logo.

Cowan reports that a mere mention in Houston of the Enron collapse raises the hackles of a lot of people.

After the collapse, about 5,000 people ended up on the street with no pension and no savings. Angie Laurio was one of them. She says she saw $500,000 worth of retirement investments vanish almost overnight.

"Their day of reckoning is coming soon, thank the Lord," said Laurio, who worked for Enron for 28 years.

Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly lying about Enron's financial strength. Lay faces seven counts of fraud and conspiracy for perpetuating the alleged scheme after Skilling resigned in August 2001.

Both men have pleaded not guilty. If convicted, each could face decades in prison and millions of dollars in penalties.

Enron's crash and the subsequent scandals roiled Wall Street, sent investors fleeing, prompted stiffened white collar penalties and upped regulatory scrutiny over publicly traded companies.

Former WorldCom Inc. head Bernard Ebbers awaits a 25-year prison term for orchestrating the $11 billion accounting fraud that bankrupted the company. Martha Stewart did five months in prison and more time confined to work and home for lying about a stock sale. Adelphia Communications Inc. founder John Rigas and his son got double-digit prison terms for robbing the company.

HealthSouth Corp. founder Richard Scrushy bucked the trend with his acquittal last year of fraud charges despite five former finance chiefs pointing the finger at him in a $2.7 billion scheme to inflate earnings.

The government has a mixed record on Enron.

The U.S. Supreme Court last year overturned former Enron auditor Arthur Andersen LLP's 2002 conviction of obstruction of justice, saying vague jury instructions allowed jurors to convict without finding criminal intent behind mass shredding of Enron documents as investigations began.

Four former Merrill Lynch & Co. executives and a former midlevel Enron finance executive are in prison for helping push though a loan disguised as a sale to help Enron manipulate earnings, while a former in-house Enron accountant was acquitted.

And five former executives accused of fooling Wall Street into believing Enron's defunct broadband unit was viable face retrials this year after their first trial ended with jurors hung on most charges.

Some Enron employees are still adrift four years later.

After working for 10 years at Enron, Diana Peters is barely paying the bills, even with two jobs.

"I don't have health insurance. I don't have any kind of benefits," she told The Early Show co-anchor Rene Syler. "I was planning to be retired as of last summer. Now, you know, I'm back to square one again."