Law & Disorder
Update: Supreme Court hears former Enron CEO Skilling's arguments
UPDATE: After 60 minutes of questioning, the Supreme Court justices appear to be split on whether former Enron CEO Jeffrey Skilling received a fair trial in Houston, with particular attention focused on whether enough time and consideration was given to juror selection by Judge Lake in the original trial.
As SCOTUSblog notes, the Supreme Court "found itself shifting between worry that the judge who tried the biggest Enron scandal case may not have done enough to assure that a fair jury was chosen, and worry that the Court should not try to micromanage how trial judges handle that process. The Justices seemed far more interested in the jury issue than in the other high-profile question before them in Skilling v. U.S. — whether former Enron Corp. CEO Jeffrey Skilling was convicted of violating an unconstitutional law."
Justices Stephen Breyer and Sonia Sotomayor expressed doubt about whether the court could be sure the jury was impartial and the trial was fair, with jury selection taking a mere five hours. Skilling lawyer Sri Srinivasan compared this unfavorably to the six days it took to select a jury in Martha Stewart's securities fraud trial.
However, Justices Ruth Bader Ginsburg and Samuel Alito, in rare agreement, seemed to believe that Skilling did not require a change of venue to find jurors without prejudice. "There were a lot of people who indicated that they didn't really know anything about this," said Ginsburg about Skilling and Enron.
When questioning turned to the "honest services" statute, only Chief Justice John Roberts and Justice Antonin Scalia seemed to have interest, likely because it is an area of law that already received Supreme Court attention twice this term.
The Court is expected to deliver its ruling no later than the end of June.
If only the Supreme Court had its own free cable channel, like C-SPAN. (JudgeWatch, anyone?) Every TV in town would be turned to it, as the Supreme Court is hearing oral arguments in the case of Skilling v. U.S. this afternoon.
Jeffrey Skilling, the former Enron CEO serving 24 years in prison after being convicted of 19 violations (one count of conspiracy to commit securities fraud and wire fraud, 12 counts of securities fraud, five counts of making false statements to accountants, and one count of insider trading), is appealing his conviction on the basis that he was unable to receive a fair trial in Houston, where the Enron collapse had a "devastating effect." He's also contesting the legality of the "honest services" statute that was the basis of one of his convictions.
SCOTUSblog has a great recap of the case and analysis of the legal questions to be dealt with by the high court today. It notes, in part:
"Much of Skilling’s challenge deals with his claim that he could not possibly have gotten a fair trial in Houston amid what his lawyers call the 'devastating impact' of the scandal on the entire city and region, and the resulting 'vitriolic' and 'blistering' publicity about the accused executives. His attorneys claimed in the petition that 'the community passion' stirred up by the case 'was as dramatic as any in U.S. criminal trial history.'
"But among those who specialize in criminal law, the case has a higher profile because of its broad challenge to the constitutionality of the federal law that criminalizes any form of fraud, if the misconduct deprived another of 'the intangible right of honest services.' That law, enacted by Congress 22 years ago to overturn a Supreme Court decision (McNally v. U.S., 1987), is a favorite tool of federal prosecutors, especially in public and private corruption cases. Its undefined language has led to countless efforts by federal judges to give it some particular meaning in order to save its constitutionality. Skilling’s appeal assailed that effort, arguing that the resulting array of lower-court rulings 'is a hodgepodge of oft-conflicting holdings, statements, and dicta' that 'only the most discriminating lawyer or judge' could understand."
Unsurprisingly, once the legal briefs were filed (you can read them here), observers and commentators unleashed venom in response.
Daily Finance's financial columnist, Peter Cohan attacks the "honest-services" argument. "Skilling, who oversaw a company that was fundamentally dishonest, is trying to get the Supreme Court to throw out a law that requires executives to behave honestly," Cohan writes. "I guess you have to hand it to Skilling. All he wants is to change America's legal system so business leaders can be safe from the annoying requirement that they be honest. He just wants the U.S. to be safe for dishonest business leaders like him."
Whereas the Houston Chronicle's Loren Steffy sums up Skilling's change-of-venue argument as "a legal stew of Texas stereotypes and an insider's arrogance about Enron's importance .... In his appeal, Skilling courts East Coast stereotypes about Houston as if the city were some sort of dusty Texas town where justice is meted out with a six-shooter and a rope."
However, The Atlantic's Andrew Cohen counters that, "This time, alas, the bad guys are right. Skilling (and his boss, Kenneth Lay,) never should have been tried in that city at that time."
By the end of the day, we'll know what the nine justices whose opinion counts think.
And just in case this afternoon's legal manuevering isn't twisty enough for you, let's not forget, as Cohan points out, that Skilling's former cohort, the late Enron head Ken Lay, gave more than $500,000 to the campaign of George W. Bush—who appointed two of the justices set to rule on Skilling's fate.