No. 1: Mark Koenig, head of Enron investor relations
Enron’s former head of investor relations, Koenig worked with top executives on quarterly conference calls with analysts. He prepared the company’s earnings statements and worked with top executives on conference calls with analysts. He revised his plea agreement to attribute to Mr. Skilling a statement that Mr. Koenig originally said he made on a 2001 call to mislead analysts about why Enron folded its money-losing retail energy unit into the company’s profitable trading unit.
Status: Pleaded guilty in August 2004 to one count of aiding and abetting securities fraud and agreed to cooperate with prosecutors. Sentenced to eighteen months.
Testimony: Koenig testified that Enron’s earnings were sometimes changed at the last minute to keep Wall Street happy and that both Skilling and Lay knew about it. He also said that the executives either made or approved of misleading statements to the public about problems at Enron’s retail-energy and broadband units.
No. 2: Kenneth Rice, head of Enron’s broadband unit
Ken Rice was a close ally of Jeff Skilling and part of Enron’s old guard of dealmakers. A former Enron trader, Rice was tapped in the late 1990s to be co-head of the company’s Broadband unit. He testified during the 2005 trial of five former broadband executives that he, Skilling and others lied to investors and analysts about capabilities of Enron’s broadband network to inflate company stock.
Status: Rice pleaded guilty in July 2004 to one count of securities fraud and forfeited $13.7 million in cash and property. Sentenced to twenty-seven months in prison.
Testimony: Rice testified that Skilling told analysts that the broadband unit could survive even when “it was flailing.”
No. 3: Terry West, Enron accountant
Terry West, the prosecution’s third witness, is an Enron accountant and former director of corporate planning. She joined the company in 1981, when it was a relatively small pipeline business known as Houston Natural Gas.
Testimony: West was the first accounting professional to testify and her testimony was very brief. Her primary role was to present budget documents (i.e., get them on the record as evidence) and explain the mechanics of how the company developed spending and profit plans that resulted in annual earnings-per-share growth of 15%. She testified that one time she changed estimated earnings on orders from higher ups.
No. 4: Paula Rieker, investor-relations executive, board secretary
Paula Rieker was the former No. 2 executive in investor relations and corporate secretary for the board.
Status: Pleaded guilty to insider trading for selling shares in mid-2001 upon learning that Enron’s broadband unit lost more money than publicly disclosed. Sentenced to two years probation.
Testimony: Rieker turned the trial’s focus to Lay for the first time, telling jurors that Lay downplayed or hid bad news from Wall Street in the months leading to Enron’s collapse, though acknowledged that she sent him a note in November 2001, calling his leadership “invaluable.” Board members were “outraged” when they learned that Lay had repaid $70 million in loans with Enron stock, even as the stock spiraled, she said, quoting one member, John Duncan, as saying, “He was using Enron like a damn ATM machine!”
No. 5: Wesley Colwell, former top accountant at Enron’s trading unit
Wesley Colwell was the top accountant at Enron’s profitable trading division from 1999-2002. For the prior 17 years, he worked at accounting firm Arthur Andersen, which collapsed along with Enron.
Status: In October 2003, paid a $500,000 fine to settle SEC civil allegations that he manipulated Enron’s earnings. Lost his CPA license and is barred from being an officer in a public company. He reached a plea agreement with the Justice Department, which requires that he testify to avoid criminal prosecution.
Testimony: Colwell said that he improperly raided Enron’s reserves to increase earnings in mid-2000 when he learned that Skilling wanted to beat Wall Street forecasts. However, he didn’t overtly say that Skilling had ordered him to do so.
No. 6: Wanda Curry, former Enron accountant
Wanda Curry, the prosecution’s sixth witness, was an in-house accountant who worked for Enron for 22 years. She was assigned to analyze billing and losses in the company’s retail division.
Status: Never charged with a crime.
Testimony: Curry talked about overvalued contracts and millions in uncashed checks at Enron’s retail energy-services unit. She teared up as she described how she felt discriminated against by Enron bosses for pushing for honest financial accounting.
No. 7: Timothy Belden, West Coast energy trader
Timothy Belden ran Enron’s Western power-trading desk in Portland, Oregon in 2000 and 2001.
Status: Pleaded guilty in October 2002 to conspiracy to commit wire fraud. Sentenced to two years probation.
Testimony: Belden said that California’s “dysfunctional” market in the aftermath of electricity deregulation left it ripe for high prices. He said Enron pocketed nearly $1 billion over nine months in late 2000 and the first half of 2001. His testimony may be best known for drawing this distinction: price volatility — not volume increases — was the primary factor in Enron’s huge electricity-trading profits.
On cross-examination, Belden frequently sparred with defense lawyers, refusing to accept the defense’s argument that trading profits were due to unit volumes.
No. 8: David Delainey, former head of Enron Energy Services
David Delainey rose swiftly through the ranks at Enron, leading Enron’s profitable wholesale energy-trading unit before being tapped to head the retail energy-services unit.
Status: Pleaded guilty to insider trading. Sentenced to two and a half years in prison.
Testimony: Delainey said the wholesale energy-trading unit built reserves and used them to “smooth” its volatile results. He said that Enron misled outsiders about the sizeable risks in its trading operations, adding: “we tended to be pretty fast and loose with the rules, generally.”
As for the retail energy-services unit, Delainey testified that, contrary to management claims that it was one of Enron’s growth areas, the unit was “a basket case” when he was handed the reins in 2001. He described a meeting with Skilling and others in which he felt pressure from his bosses to go along with a plan to hide retail losses by transferring the stressed unit into the healthy wholesale business.
“We lied to shareholders, employees, the public,” Delainey testified. “It was just plain wrong.”
No. 9: John Sides, Enron accountant
John Sides, 52 years old, was a rank-and-file employee who worked at Enron for nearly 22 years. His 401(k) was heavily invested in Enron stock and was destroyed by the company’s collapse.
Status: Never charged with a crime.
Testimony: Sides testified that, in October 2001, he bought Enron stock on two different occasions following pep talks Lay gave to employees. He testified about the collapse of his retirement fund, but wasn’t allowed to tell jurors how much wealth he lost as per a pretrial ruling prohibiting such testimony as too inflammatory.
“Basically, we [employees] were told articles in the newspaper were rumor and we should look to management for information about the company,” Sides told jurors.
No. 10: Kevin Hannon, ex-operating chief of Enron Broadband
Kevin Hannon was Ken Rice’s former deputy at Enron’s wholesale-trading and broadband units. He delivered one of the biggest blockbuster quotes in the first five weeks of the trial.
Status: Pleaded guilty to conspiracy for scheming with Rice and others to inflate Enron’s broadband network capabilities to Wall Street. Agreed to testify under a plea deal with the government. Sentenced to two years in prison.
Testimony: Hannon described to jurors a meeting at a hotel in May 2001. At that meeting, executives discussed a report from an analyst who suggested that Enron stock should be valued at less than half the $60 a share it was worth at the time, and questioned Enron’s profit-making practices. Hannon testified that Skilling’s response to the report was, “They’re on to us.” Though, on cross-examination, Hannon conceded that the remark may have been intended sarcastically.
Hannon also recounted a disclosure by Fastow about the outside partnerships known as LJM that did a lot of business with Enron. Fastow allegedly told the group, “LJM is a good deal for me.” The remark, said Hannon, “was met by stunned silence.”
No. 11: Andrew Fastow, former Enron CFO
Fastow was hired at Enron by Skilling in 1990, and became CFO in March 1998. Over the next several years, Fastow created off-balance-sheet partnerships that put him at the center of the firm’s most controversial deals. He was forced out in October 2001, just before the company’s collapse.
Status: In January 2004, he pleaded guilty to two criminal counts — of a 98-count indictment — and agreed to a 10-year sentence in return for his cooperation in future trials. Sentenced to six years in prison. His wife, Lea, completed a one-year prison sentence in July 2005 for filing a false tax return. The government has seized nearly $30 million from the Fastows.
Testimony: Fastow was on the stand for four days. He testified that he ran partnerships that hid huge losses at Enron and boosted earnings, with Skilling’s blessing. Of those deals, he quoted Skilling as saying, “Get me as much of that juice as you can.” He also testified about a master list, known as “Global Galactic,” that he once wrote to keep track of the deals. Day two of his testimony put the focus squarely on Lay. Fastow testified that Lay knew about Enron’s financial woes in 2001, just days before he gave an interview that said the company was in its best shape ever. On cross-examination, he admitted to lying to Lay over the money he admitted stealing from the company.
No. 12: Christopher Loehr, former employee of Enron, LJM
Christopher Loehr started working for Enron in his mid-twenties as an investment analyst. Enron paid his salary, but most of his work was for Fastow’s LJM partnerships. Loehr kept two offices – one for Enron and one for LJM – “in order to keep up appearances that his work was separate”, according to reports from the Houston Chronicle.
Status: Struck an immunity deal with prosecutors.
Testimony: Loehr was brought in to corroborate Fastow’s testimony that Enron improperly used partnerships to make earnings seem better than they actually were. He supported Fastow’s allegations, but never mentioned Lay or Skilling by name, and defense lawyers on cross-examination said the analyst was at too low a level to know how the LJM deals were actually negotiated.
No. 13: Johnnie Nelson, Enron pipeline worker
Johnnie Nelson, 46 years old, was a career Enron pipeline worker from Bloomfield, New Mexico who had all of his retirement savings in Enron stock.
Status: Never charged with a crime.
Testimony: Nelson testified that he lost his retirement savings when Enron collapsed and pointedly accused Lay of misleading workers. He said that he had previously diversified his holdings, but decided to keep it all in Enron stock after Lay’s assertion at a 2001 employee meeting that the company was going to bounce back. On cross-examination, an attorney for Lay asked Nelson whether Lay had done anything to violate the law, to which Nelson replied, “He violated my trust. That’s all I know.”
No. 14: Vince Kaminski, head of risk and research at Enron
Vince Kaminski, 58 years old, is a mathematician and economist. His job at Enron was to monitor its business deals and assess risk.
Status: Never charged with a crime.
Testimony: Kaminski testified that he tried to do his job, warning executives of what he believed was excessive risk in the LJMs and Raptors, but was met with resistance. He said his allegations of LJM1 conflicts got him booted from the risk unit.
Kaminski described one incident, at an October 2001 management meeting headed by Lay, in which he, Kaminski, was cut off and escorted off the podium when he said, that Fastow’s actions were “not only improper, but terminally stupid” and suggested that Enron should “come clean.” After the meeting, Kaminski received a call from HR, which caused him concern that he might be fired.
On cross-examination, he described an email he sent to Enron’s accounting firm, Arthur Anderson sarcastically wrote, “Accounting 001: One cannot eat the cake and have it too.” When challenged by one of Lay’s lawyers that he wasn’t addressing accounting students in that email, Kaminski replied that, in some instances, executives may have “needed some remedial accounting classes, just have some common sense.”
No. 15: Sherron Watkins, former Enron Global Finance executive and company VP
During her time at Enron Global Finance, Watkins reported to Fastow. Before Enron, she had been an auditor Arthur Andersen.
Watkins has proved key to the government’s investigation, telling Congress in early 2002 that Fastow and Skilling were likely to blame for Enron’s fall and winning praise for her convictions.
Status: Never charged with a crime, despite repeated admissions of insider trading.
Testimony: Watkins testified about the infamous 2001 memo to Lay in which she warned him about suspicious deals that could lead Enron to “implode in a wave of accounting scandals,” and then a subsequent meeting with Lay. “He seemed surprised that these things could be problematic,” Watkins told jurors, adding that he winced when she discussed certain concerns.
She testified about the off-balance-sheet financial structures known as the Raptors, which carried loads of debt and were backed by Enron stock, saying, “Accounting just doesn’t get that creative.”
No. 16: John R. Sult, former accountant for Arthur Andersen
John R. Sult oversaw accounting for Wessex Water Ltd., a British water utility that was part of Enron’s multibillion-dollar water business, Azurix.
Status: Never charged with a crime.
Testimony: Sult testified about the fact that Enron officials claimed they were planning to spend well over $1 billion to expand its water business, thus helping it to avoid a huge write-down for the business. Sult also testified that Lay misled analysts during a conference call about the status of Andersen’s review of the water business. Lay said that Andersen’s review concluded that a huge write-down wasn’t necessary, when in fact, Andersen’s review at the time was still “preliminary and incomplete.”
No. 17: Thomas Bauer, former accountant for Arthur Andersen
Bauer oversaw the books for Enron’s profitable trading arm, Enron North America. Referred to by some as Andersen’s “shredder-in-chief,” Bauer was among several auditors disciplined for the tons of Enron-related audit documents and emails that were destroyed.
Status: Never charged with a crime. During Andersen’s obstruction of justice trial in 2002, Bauer invoked his Fifth Amendment right not to testify.
Testimony: Bauer testified that Andersen auditors were unaware that Enron was using its huge reserves to boost earnings, and that if the auditors had seen documentation of such activity, they would’ve curbed the practice. “Reserves can’t have any role to hit an earnings target. It’s an asset to cover a liability, period,” Bauer testified.
No. 18: Ron Barone, managing director at Standard & Poor’s
Ron Barone is a credit analyst at Standard & Poor’s.
Status: Never charged with a crime.
Testimony: Barone testified about a phone call he received from Lay in October 2001, which Barone said likely headed off a potential reduction in Enron’s credit rating. The call came right after Enron disclosed an unexpected accounting adjustment of $1.2 billion. Barone said he told Lay that a larger write-down could trigger a credit-rating downgrade. Lay acknowledged the company’s deteriorating financial position, according to Barone, but assured him that there were no more surprises. Lay added, however, that he “still wanted his financial staff to be creative,” Barone testified.
Prosecutors maintain that Lay hid Enron’s true financial troubles from debt-rating agencies to preserve the company’s credit rating.
No. 19: Ben Glisan, former Enron treasurer
Ben Glisan Jr., the prosecution’s final witness, was Enron’s former Treasurer and chief architect of the Raptors. The Raptors were four LJM2-related entities created in 2000 that were backed by Enron stock and, he claimed, wrongly treated as independent of Enron.
Glisan has been described as a popular figure at Enron; Skilling once said he had the reputation of a “boy scout.”
Status: Glisan was the first Enron executive to go to prison. Sentenced to five years in prison.
Testimony: Outside the jury’s presence, Glisan invoked the Fifth Amendment when asked if he committed any other crimes while at Enron.
Glisan then testified that Enron’s financial condition was “weak” on the day that Skilling resigned. The prosecution then played tapes of Lay and Skilling from that same day, offering an upbeat assessment of the company’s condition and outlook. When asked if Lay and Skilling were aware of the problems, Glisan replied, “Yes, they were.”
No. 20: Glenn Ray, stockbroker at Charles Schwab
Glenn Ray, a Denver-based Charles Schwab stockbroker, handled Skilling’s sale of Enron stock a month after he’d resigned as CEO of the company.
Status: Never charged with a crime.
Testimony: Ray testified that Skilling placed an order to sell 200,000 shares on September 6, 2001. That sale was stopped pending a letter from Enron verifying that Skilling was no longer an officer of the company, to ensure that this wouldn’t qualify as insider trading.
Then the September 11, 2001 terrorist attacks occurred and the market was closed for six days. Skilling’s order never went through. On September 17, the first day the market opened after the attacks, Skilling placed an order for 500,000 — of his 936,576 — shares. On a tape of the transaction played in court, Skilling is heard saying, “”I don’t like it [the market's drop] … I’d like to sell 500,000 Enron shares.”
No. 21: Robert Martin, FBI agent
Robert Martin is an agent for the Federal Bureau of Investigations, who reviewed many Enron documents.
Status: Never charged with a crime
Testimony: Martin testified about the advances Lay took on his credit line. He testified about the bank account where those advances were deposited and the bank withdrawals made by the Lays to pay off their home mortgage.
No. 22: Joanne Cortez, former Enron employee
Joanne Cortez was a former Enron employee who oversaw the line of credit Enron provided to Lay.
Status: Never charged with a crime.
Testimony: Cortez testified about the transactions Lay made with Enron. She talked about the size of the credit line, and the fact that the board agreed to increase the credit line to $7.5 million in October 2001, just before the company collapsed. She said he used to pay back the credit with Enron stock and the decision to raise the amount upset her. She said she didn’t sell her own Enron shares based on what she knew about Lay’s deals because she didn’t think it was right.
Lay’s credit-line transactions were not part of the indictment, but the government used them to demonstrate to the jury that Lay knew there were problems at Enron and was cashing out.
