Change of Venue and Rex Shelby’s Pie Charts

As I research Enron Broadband Services (EBS) and talk with people involved in the case, I continue to discover fascinating stories. Here is one about EBS defendant Rex Shelby and the pre-trial change of venue motion by the EBS defendants.

After Joe Hirko, Scott Yeager, and Rex Shelby were indicted by the federal prosecutors of the Enron Task Force (ETF), they had a number of studies done to determine what the atmosphere of bias was for a trial in Houston. Study after study showed that the Houston populace was locked into a witch hunt mentality. More than 85% of the public consistently stated that any executive indicted by the ETF was automatically guilty and should be convicted — most importantly, these people said that nothing could change their minds on this point — in other words, they admitted that they could not be an unbiased juror.

Logically, the EBS defendants filed a motion for a change of venue for the trial (meaning a move of the trial to someplace other than Houston) in order to have a chance of getting an unbiased jury. Of course, Judge Vanessa Gilmore denied the motion. Even though to any rational person, a change of venue would seem to be a reasonable and necessary action in a situation such as the one the EBS defendants faced, the Judge denied the motion. The sad truth is that it is next to impossible to get a change of venue in the USA — the courts find it “inconvenient” for themselves and the courts’ convenience always seems to trump the defendants’ rights.

In opposing the defendants’ change of venue motion, the federal prosecutors essentially gave the same two ridiculous arguments that prosecutors and judges always give in opposing a change of venue motion:

1. Even though 85% of the jury pool is tainted, 15% is not tainted. And Houston is a big enough place such that 15% of the population is a large enough pool to contain 12 unbiased jurors.

2. Even though an 85% tainted jury pool is admittedly horrible, most of the other places in the country show in the neighborhood of a 70% anti-Enron bias — therefore, moving the trial would not benefit the defendants much. The prosecutors argued that a 70% tainted jury pool is only about 17% better than an 85% tainted jury pool — the formula the prosecutors used was (85%-70%)/85%.

Now, if you don’t think too hard about those arguments, they seem kind of reasonable, right? However, they totally ignore the actual real-world jury selection process (called “Voir Dire”). Here is where my research and interviews about EBS bore fruit. I understand that EBS defendant, Rex Shelby, who has a mathematics and engineering and computer science background researched the Voir Dire process and came up with an interesting response to the two points above.

Regarding point 1, Shelby discovered that, in a typical felony jury trial, a court will order 65 potential jurors to be brought to court for the process of jury selection, from which the attorneys are tasked to chose 12. Now, if 15% of that group are unbiased, that means that there could be only 10 unbiased jurors available for selection in a group of 65 potential jurors. There is statistically no possible way to get 12 unbiased jurors from an actual real-world jury selection process when only 15% of the jury pool is unbiased!

But Shelby found that the situation is even a lot worse than that. During the jury selection process, each side is allowed 10 “peremptory strikes”, meaning that each side can get 10 jurors eliminated from selection without giving any reason. Therefore, when only 15% of the jury pool is unbiased, the prosecutors can strike the only 10 unbiased jurors available to the defendants. If the prosecutors make the right choices, they can ensure that there is not even a single unbiased person on the jury, and there is little the defendants can do about it. Think about that for a minute — in Houston, given the 85% anti-Enron bias, it was simply impossible to seat a jury with even a single unbiased juror!

Regarding the prosecutors’ point 2 above, Shelby turned that nonsense on its head. He pointed out that to get the statistics right, you must look at the size of the unbiased pool, not the biased percentage. An increase of an unbiased jury pool from 15% to 30% is an increase of 100% (not the 17% that the prosecutors claimed) — that is, it doubles the possibility that the defendants can get a fair trial. Instead of 10 possible unbiased jurors in the selection pool, there would be 20 possible unbiased jurors in a location other than Houston.

And if you consider the peremptory strike rule, the improvement is more dramatic than that. In Houston, with the strikes, the jury is composed of zero unbiased jurors. In another location, up to 10 unbiased jurors have a chance of being selected for the jury without the ability of the prosecutors to strike them off. That is still not 12 unbiased jurors, but 10 is infinitely better than zero!

I understand that Rex Shelby even created some simple pie charts that he wanted to use in an oral reply to the prosecutors’ inane arguments. Shelby’s logical argument was that change of venue should be automatic when there is no statistical possibility of getting an unbiased jury in a given location. Shelby believed it was a constitutional due process issue — every defendant has a constitutional right to a fair trial — but if there is no way to seat an unbiased jury, then a fair trial is, by definition, impossible. Therefore, it is the duty of the Court to find a way to ensure a fair trial or to dismiss the charges when a fair trial is not possible.

Unfortunately, Rex Shelby did not get to present his argument and pie charts to Judge Gilmore — the Judge did not permit an oral hearing — she simply denied the EBS defendants’ change of venue motion without explanation.

Now, here is an fascinating postscript to this story. I understand that, alone among the five EBS defendants, Rex Shelby actually preferred a trial in Houston. I was told that Shelby believed that Houston was his hometown, and he wanted to beat the federal prosecutors in a Houston courtroom with Houston jurors. Shelby believed that the federal government’s case was so obviously false and ridiculous that he could prove his innocence even to jurors who had steadfastly professed their anti-Enron bias. However, Shelby went along with the other EBS co-defendants on the change of venue motion. I find this gem of information about Shelby fascinating — he wanted the trial in Houston, in spite of his own analysis about the utter unfairness of the location. And, at the same time, he did not let his personal preferences interfere with his rigorous research on the topic in order to make the defendants’ argument for a change of venue as compelling as possible.

In the end, the EBS defendants went to trial in Houston knowing upfront that they were presumed guilty by all the jurors and that they must prove their innocence at trial. And, against all odds, they accomplished just that. After three and one half months of trial, the federal prosecutors got zero convictions out of about 200 total counts against five EBS defendants. I guess Rex Shelby was right!

Lance Armstrong and Enron Broadband

Okay, here’s what I want you to do: Please read this article about the USADA’s “case” against Lance Armstrong, and, as you read, substitute DOJ in the place of USADA and substitute one of the Enron Broadband Services (EBS) defendants (say, Joe Hirko or Scott Yeager or Rex Shelby) for Armstrong. If you do this, you will find that the article explains the EBS case fairly accurately. Here are just a few of the analogies:

In the Armstrong case, there is no tangible evidence of a crime. All the actual recorded drug tests indicate that Armstrong was drug-free. The USADA has built a case largely on verbal testimony from tainted witnesses.

In the EBS case, there was no tangible evidence of a crime — the only tangible evidence, the actual network and software, was disassembled and auctioned off before anybody was indicted, with the explicit knowledge and permission of the federal prosecutors. The DOJ made sure that this tangible evidence was not available to the defendants before they brought their indictments!

In addition, the written evidence, the technical documents and weekly status reports, also indicate that there was no crime at EBS. Yet, in his autobiographical Book, Convictions, federal prosecutor, John Kroger, said that he decided to ignore the “more than ten million documents” of available written evidence and to build a case “primarily on the testimony of witnesses.” These witnesses were incredibly tainted, having largely been coerced and coached into testifying by the federal prosecutors.

Study after study has shown how unreliable oral evidence is, even in simple situations. In complicated white-collar cases, oral testimony is essentially worthless. And when the witnesses are expressly testifying only because they are under the thumb of the prosecutors, as they were in the EBS case, then the oral testimony is worse than worthless — it is coached, tainted, and deliberately misleading.

Look, I have no idea if Lance Armstrong is guilty of doping. All I can say is that the USADA has not made a case and has shown no tangible evidence. The idea that Armstrong could be arbitrarily stripped of his titles by such an organization is ridiculous. Lance Armstrong is being presumed guilty by the USADA and being asked to “exonerate” himself.

Sorry, USADA, it does not work that way in a just society! The burden is on the USADA to make a public and compelling case against Armstrong. Armstrong has no obligation whatsoever to participate in the farce. Declaring that a person is guilty of a crime and then telling him he must prove his innocence is not justice — it is a witch hunt.

The press and the public let the DOJ get away with a witch hunt in the EBS case. Let’s hope we can show more grit and indignation and sense of justice in Lance Armstrong’s case.

This Explains So Much About The DOJ

My best girlfriend, Nicki, reports that the DOJ is seeking mentally unstable attorneys.

Sayeth Nicki:

Are you mentally challenged? Have mental “conditions” or partial / full paralysis? The DOJ seeks you! It wants you! It’s targeted your “disability” as one that’s obviously lacking at the department, and therefore it will likely be pretty easy for you to get a job there! Our country also needs dwarves, psychos and people with missing limbs.

If you think I’m kidding, I’m not.

The Justice Department needs you!

This is what we’ve come to in this country. Skills don’t matter. The ability to do the job is secondary. Your scabs, shortcomings, deficiencies and other flaws will give you a leg up. Not your abilities. Not your hard work. Not your smarts. Hell, the DOJ apparently doesn’t want brains! It’s specifically looking for the mentally challenged!

Granted, the candidates will apply for non-attorney positions, but still… if you’re a midget, a loon or any other applicant that would otherwise qualify for the job you will have specific hiring preference over those who weren’t so “lucky” as to be afflicted with missing limbs or mental deficiencies.

Nicki also has the actual job announcement on her site, so do check it out.

And remember, these are the guys prosecuting you. The mentally retarded are desired by the DOJ to prosecute you. Just let that sink in for a bit. Also: John Kroger is likely one of the first affirmative action attorneys hired under this brilliant plan.

Big Writes Cara Ellison’s Bio

Me: I need help writing a bio. What should I say?

Big: Cara Ellison currently is employed at the DOD’s Division of Occult and Supernatural Phenomena. She was married twice, divorced three times. Hobbies include falconry, transcendental meditation, and extreme origami.Founded the Inclusive Vegan Movement, which adds meat, eggs, and dairy to the traditional Vegan regimen.

Me: I wish my life was as exciting as your imagination.

Update

Big has generously added a few items to my biography.

-Runs marathons for relaxation.

-Speaks five languages, simultaneously.

-Has one brown eye and one blue eye, but they appear hazel in the evening.

-Inventor of the pinky ring, whoopie pies, and external combustion engines.

-Leader of effort to make tug of war an Olympic event in 2016.

-Owns a Russian Blue Cat, a Portuguese Water Dog, a Vietnamese potbelly pig, and a parrot that curses in Italian.

-Dated Ben Affleck until his career went south.

-Wrote the definitive treatise on Subjective Objectivism.

-Owns patents on the colors deep scarlet, orange-pink, and medium blue.

-First person to use the phrase “Now, that’s what I’m talking about!”

Today In Enron History

August 14, 2001 (4,018 days ago) Jeff Skilling resigned from Enron Corporation. There were personal problems he wanted to address, and he wanted to spend more time with his family. Having flirted with the possibility of leaving for quite a long time, he’d finally made his decision and on this day in Enron history, it was announced.

His tenure at Enron was marked by a string of dazzling successes. Like a champion surfer, he caught the wave at exactly the right time. In his case, it seemed like technology, the economy and the business climate in general all converged at exactly the right moment for projects like the Gas Bank, Enron Broadband Services and even Azurix.

But those successes came at a steep cost. Like most successful people, he spent his life at the office. At trial he would later said, “I bled Enron blue.” He would talk about being exhausted, needing to breathe. He was still a relatively young man – only 48 at the time. He could do a lot of things with his remaining years. But first, he wanted to spend some time with his family.

He left the Enron building that day believing he had given the company the best years of his life. He had given all his creative energy, all his passion and his considerable native intelligence to the company. It was in good financial shape. He must have felt free as he piloted his car down Allen Parkway. He must have been looking forward to the next chapter.

So This Is Where We Are As A Culture

This showed up in my search terms:

Forget the fact this person doesn’t even know how to spell the thing they hate, they’re now attempting to tie Romney to Enron because they know Enron equals The Very Bad Thing in popular culture.

Dirty politics is nothing new but the heavy handed approach is sort of amusing.

Enron Blah Blah Bush! Blah Blah Blah

How embarrassing to believe this, and how embarrassing to actually express these opinions on the internet.

Naysayers try so hard to cobble together these conspiracies about Enron and really, it’s just sort of pathetic and sad.

Apology

If you received a LinkedIn invitation from me yesterday, please disregard it. It was an accident. I rarely use LinkedIn and didn’t intend to send any invites. I’m sorry for filling your inbox with junk. It will not happen again.

Is Andy Fastow Innocent?

Yesterday I was having a conversation with an Enron executive who put some difficult questions to me, questions I found myself blanking on.

For instance, why was there no discussion or accusation of anything criminal until 2002 – several months after the collapse of the company?

Why does a declining stock price cause bankruptcy – doesn’t that just mean the company is worth less?

And what exactly was Andy Fastow supposed to have stolen?

That last one tripped me up, and I felt a little ashamed because I’d accepted that there were bad actors at Enron and that he was probably one of them. But now that I really think about it, he was accused of having “inflated Enron’s earnings and hid debt.” That never happened at Enron – I know that for a fact. But, for the sake of argument let’s say it’s totally true. How does that equal theft? If Andy Fastow hid debt, he didn’t personally benefit from that, and then the conversation starts to wander toward an Honest Services discussion, which puts him about on par with Jeff Skilling.

The three transactions that I’ve said Fastow “stole from” were Chewco, RADR and Southampton. And now that I think about it, I don’t think he stole money at all. Chewco was trouble because it was alleged to have been incorrectly accounted for years. Southampton was the deal that sent the NatWest Three to prison. And RADR was a wind farm deal in which both Lea and Andy Fastow supposedly got kickbacks. But that isn’t theft, and the more I think about it, the more I am furious that I myself fell for the line that Andy Fastow is a thief.

In The Smartest Guys In The Room Sherron Watkins pours on the snark when she says, “We all knew Andy didn’t have the strongest moral compass…”

Well if that’s true, why didn’t anyone rein him in? And furthermore, if he had a reputation as someone who was willing to bend the rules, did that make it easier to accuse him of all manner of things that he might not have actually done? He’s sort of the Boo Radley of Enron, isn’t he? The guy everyone *just knows* did something terrible because he was a hard-ass at the PRC and maybe he took the last donut one morning.

But what if we’re all wrong and he’s not that guy? What if he’s just a much a victim of an overzealous DOJ as Jeff Skilling?

I think I need to consider this seriously. I will be spending the next few weeks reviewing Andy Fastow’s transactions, and sharing any insights and questions I have.

Communists and Un-indicted Co-conspirators

Senate Majority Leader Harry Reid has never been mistaken for an honorable man; therefore his tactic of using an unnamed source to accuse Mitt Romney of not paying taxes and then declaring that it is Romney’s job to prove him wrong is of no surprise at all. I agree with George Will’s assessment that Reid’s accusations reek of McCarthyism.

I have compared the Enron witch hunts to McCarthyism in other posts. Every defendant and every attorney I have talked with has acknowledged that each Enron defendant went to trial knowing that they were presumed guilty by the jurors and that they must prove their innocence at trial. And a non-skeptical press and a hysterical citizenry felt the same way — Enron executives were all guilty by decree. Just re-read the old dribble of Houston Chronicle columnist Loren Steffy about Enron if you want to see mindless bias in print.

However, in addition to the presumed guilty aspect of the Enron prosecutions, the description by George Will (and Charles Krauthammer also) of Joseph McCarthy’s infamous speech on February 9, 1950 made me think of another eerie analogy with the Enron prosecutions. In that frightening speech, witch hunter McCarthy claimed to have a list of secret Communists, but he refused to publicly and openly tell what names were on his list:

“I have here in my hand a list of 205 . . . a list of names that were made known to the Secretary of State as being members of the Communist Party and who nevertheless are still working and shaping policy in the State Department. . . .”

What struck me is the fact that the number 205 is about the same number as that on the total list of un-indicted co-conspirators named by the Enron Task Force (ETF) across the multiple Enron-related trials. What a spooky coincidence!

An un-indicted co-conspirator is a person who the prosecutors are accusing, by fiat and without requirement of proof, of being part of a criminal conspiracy, but who the prosecutors are saying they are “choosing” not to indict. In the Enron Broadband case alone, there were more than three un-indicted co-conspirators for every person indicted by the Feds. Federal prosecutors are fond of designating people as un-indicted co-conspirators for a number of reasons:

1. It requires no presentation of evidence by the prosecutors — judges routinely accept this designation without question.

2. The people accused of being un-indicted co-conspirators do not get to defend themselves against the designation — often, an un-indicted co-conspirator is even unaware that he has been so designated because the prosecutors get to keep the list of names hidden from the public.

3. At trial, the prosecutors are allowed to present into evidence statements from un-indicted co-conspirators
without calling the people to the stand where they could defend themselves and where they could be cross-examined by defense attorneys.

4. The prosecutors like to “remind” potential witnesses of their un-indicted co-conspirator status as an intimidation tactic — to coerce them into “cooperating” with the prosecution or to intimidate them into not testifying for the defense. The ETF used this tactic with much success in the various Enron prosecutions.

Basically, the prosecutor’s ability to name a person as an un-indicted co-conspirator without proof is like the right to slander a person without recourse by the wronged party. It also reveals one of the many systemic advantages that the prosecution has over the defense in our criminal justice system — there is no off-setting ability that the defendant has which gives him similar capabilities.

McCarthyism, it seems, is alive and well at the Department of Justice and has become an accepted practice by federal prosecutors.

Humpback Whales and Enron

A recent piece by George Will caught my attention. In this example of prosecutorial misconduct, a marine biologist, Nancy Black, has been hounded by the federal government because she “whistled at a humpback whale”. As incredible as that situation seems, it is, unfortunately, not even rare. In particular (I bet you knew this was coming!), it has many parallels to certain Enron prosecutions. Take, for example, the hounding of Rex Shelby, a subject I have written about quite a bit on this blog (check out the “Rex Shelby” tag on the right-hand sidebar for more information on his case).

Rex Shelby, a software engineer, was hounded by the federal government for nine years before he finally exhausted the legions of prosecutors and agents sent in waves against him. In Shelby’s case, the whale was the Broadband Operating System (BOS), a software technology developed by EBS engineers. Shelby, incredibly, was charged with saying things about the BOS that had already been said and written about about by the engineers in charge of developing the BOS — things that EBS status reports clearly indicate were true. Shelby won the initial trial, but, as in Black’s case, the pursuit of Enron people had “become a matter of institutional momentum”, so the Feds re-indicted Shelby and began moving towards a second trial. Like Black, Shelby eventually exhausted the bulk of his life savings defending himself. Although, he desperately wanted a re-trial, he eventually settled with the Feds who desperately wanted to avoid a re-trial which they seemed to increasingly understand would be extremely difficult for them to win.

In this entire worthless exercise, Shelby spent more money on his defense than he was accused of making at EBS. And the Feds spent many times that amount hounding Shelby, probably in the tens of millions of dollars of taxpayer money. What a terrible waste of taxpayer funds and a terrible injustice to Rex Shelby. I wish there had been someone of George Will’s stature to write about Shelby’s case back when it might have made a difference.