All About Rex’s Community Service

Rex Shelby, the last man standing in the Enron cases, remains one of the most popular topics among readers of this blog. A previous post about Paris Hilton and Rex Shelby made me curious about what Rex did for his community service. So I did some investigating — what I discovered is amazing!

Rex Shelby’s community service requirement was 230 hours. I have found that most people get brainless assignments that require little of them (in terms of initiative or creativity) and which have little lasting impact — therefore, the people typically put little effort into the service — they do their time and that’s it. I understand that Rex requested of the Probation Office that it assign him something challenging through which he could really accomplish something useful.

Therefore, the Probation Office assigned Rex to an organization that helps the most desperate people in society learn how to find jobs. The organization teaches people how to search for jobs, how to write resumes, how to interview, etc. It makes sure they have clothes for a job interview. The organization makes sure that the people learn the basic computer skills needed to find jobs in today’s world — it makes sure all the people have an email account, for example. The mission of the organization is to move jobless people into jobs.

Rex Shelby helped the organization in a number of ways, but his core responsibility was to work with people to create resumes and cover letters to apply for jobs they wanted. Rex helped the homeless, veterans, ex-cons, disabled people, people with little education, recent immigrants, etc. — the most needy among us, in other words. Within his 230 hours of community service, Rex worked with more than 200 “clients”. He routinely worked hours that he didn’t count against his official total. He became a popular worker at the organization among the people needing help — people requested him by name because of what they heard from others he had worked with — people gravitated to him because he was kind to them and because he had a high success rate — he became known as “Mr. Rex” among his many Hispanic clients. Rex continued to help the organization long after his formal community service obligation had been met.

I understand that the organization has contacted the Probation Office several times to ask for more people like Rex Shelby. The Probation Office has told the organization that “unfortunately, we cannot find any more people like Rex.”

I am not surprised at what Rex Shelby was able to accomplish at that organization — it is consistent with his professional and personal history. What amazes me is that Rex, an innocent man who was falsely indicted by the government and has reason to be bitter and angry, shows no signs of either emotion and has been willing to contribute so much to others during his inane and worthless punishment phase.

This story just reinforces my disdain for the Department of Justice, the Enron Task Force, and the slimy prosecutors who hounded Rex Shelby and the other Enron Broadband defendants. Rex makes those prosecutors look small.

Enron Broadband Ventures

A Forbes article mentions Enron’s “venture fund”. The line that caught my attention was this one: “[Swildens] acquired Enron’s venture portfolio in a bankruptcy proceeding in 2002.”

I’m not actually interested in Swildens, of course; I am interested in Enron. So here’s some background about Enron Broadband Ventures (with some juicy EBS insider baseball). Enron Broadband Ventures was the investment arm of EBS. It had a few early successes. It invested in FastForward Networks, a software manufacturer acquired by Inktomi. It also invested in Avici, a developer of high-speed, high-bandwidth network routers. Enron acted as the company’s technical advisers to help them develop its products. Meanwhile, Enron used Avici’s routers to power the broadband trading operation.

Avici would later become ensnared in the Enron mess because LJM2 and Raptor 1 did a hedge in September 2000 for the tech firm. The DOJ says the hedge was fraudulent. When Andy Fastow pleaded guilty he stated that he backdated documents to make it appear that Enron locked in the value of its investment in Avici in August of 2000, when Avici’s stock was trading at its all time high price.

Here is an old Forbes article (January 2000) about the deal with Avici. There are some quotes by John Griebling, which frankly surprised me. Griebling, by all accounts, is a hard-core, old-school engineer, someone I personally would not select to make comments to the media. But that is just me. (On the other hand, maybe in a random act of journalism, the writers actually wanted to know about the software, not the gloss. For that, Griebling would be a good choice; I just don’t associate Forbes or Fortune or Business Week with actual journalism.)

For context, John Griebling became head of network operations and engineering about the time John Bloomer became head of products. Bloomer, Griebling, and Collins were Scott Yeager’s guys. (Stan Hanks reported directly to him, for those keeping track of these things.) Griebling was initially pretty close to Bloomer, but it became obvious after a while that Bloomer was using him. Bloomer began to trash Griebling covertly in his emails while pretending to be his friend. Griebling found out about it and the two had a falling out that was never repaired. There are some funny emails from Griebling to Bloomer in which he calls Bloomer’s process nonsense “gobbly gook”.

Griebling meant well, but most accounts indicate that he was overwhelmed by his job at EBS. One person said he was a hothead who thought he could get things done by bullying people. He once, toward the end of 1999, exploded at David Berberian in a meeting (accusing Berberian of wanting to control things, which seemed to be a regular accusation). Joe Hirko, not liking confrontation, walked away. So Rex Shelby – who is very close to David Berberian- jumped in and told Griebling he was crazy, and they needed to talk now.

In the hallway, he schooled Griebling on Berberian’s accomplishments, stating that everything tangible that had been accomplished by EBS in 1999 had Berberian’s name on it. Griebling wrote a letter of apology to Berberian that same afternoon. (A classy move, in my opinion.)

When the company collapsed, John Kroger saw him as an easy target. Griebling initially made some stupid comments to Kroger, but then he tried to backtrack and got threatened by Kroger at the Grand Jury.

Ending Legal Impoverishment

In a previous post, I wrote about the shameful, but ubiquitous, use of impoverishment by the federal government in prosecuting people. It is one of several obviously harmful practices that have taken over the system of criminal justice in the USA. Let’s put this into perspective.

The U.S. federal government is the most powerful entity in the world. The resources of any individual are negligible compared to those of the federal government. In America, we should be most protective of our individual liberties when facing the situation of the federal government wielding its enormous powers against a private citizen.

So let’s start with the basic concept that, in the USA, an accused person is presumed innocent until proved guilty. Therefore, an accusation (meaning an indictment in criminal cases) is not proof of anything — it is merely an accusation, nothing more. An indicted person is completely innocent and should be so treated until the Feds prove their accusations at trial. An accused person should not be punished prior to trial or have his ability to defend himself impeded in any way.

So, here is my proposal:

1. Abolish the ability of the federal government to seize the assets of an accused person. An accusation is not proof of anything — the accused person is innocent — his assets belong to him unless/until the Feds win a conviction. An alternative solution, if it is impossible to achieve the complete elimination of asset seizure, is to make the Feds pay a penalty for seizure of assets when the defendant is acquitted — the penalty must be large — I propose that the Feds reimburse the acquitted defendant by paying a penalty equal to at least four times the value of the improperly seized assets.

2. Make the accuser, the federal government, bear the full cost of the defendant’s legal costs as they are incurred. Only if the Feds win a conviction against the defendant must the defendant reimburse the Feds for the legal costs of his defense, and then, only that portion of the costs associated with the convicted counts — a defendant does not reimburse the Feds for the legal costs associated with acquitted or hung counts. In addition, the government must pay a penalty on counts that are acquitted — again, the penalty must be large — I propose that the Feds pay the defendant at least four times the legal expenses associated with the defense against the acquitted counts. If a defendant is exonerated on all counts, I would add an additional penalty of substantial damages for false prosecution.

I am not proposing these steps for private suits (although that situation needs reform also) — I am dealing here only with the situation of the state prosecuting private citizens — this is the scenario in which we need to be most aggressive in defending the rights of the individual. The implementation of these reforms would begin to re-introduce balance into a criminal justice system that is now stacked in favor of federal prosecutors:

* It would finally begin to penalize the ubiquitous practice of over-charging in which the Feds heap counts on defendants at will in order to increase their plea bargaining and trial advantages.
* It would mean that Feds could not seize assets to deprive defendants of the ability to hire good lawyers and to rebut charges.
* It would decrease the overwhelming leverage that Feds have in coercing plea deals.
* It would encourage defendants to exercise their Constitutional right to defend themselves at trial rather than yield to plea bargaining pressure.
* It would mean that all defendants have the financial means to defend themselves and to go to trial.
* It would mean that defendants who win would not be financially impoverished by the false indictments.
* It would encourage prosecutors to be responsible and conscientious in their prosecution decisions.

No, I am not optimistic that these reforms will be adopted any time soon. We seem to live in a time of acceptance (even broad encouragement) of intrusive government. But I can always press for change and hope that the act of highlighting solutions, along with the problems, will help clarify the issues so that more people become informed and involved in pushing reforms.

Legal Impoverishment

The impoverishment of defendants is a basic strategy of federal prosecutors. Prosecutors use impoverishment as a means to cripple the ability of an accused person to defend himself. This, of course, gives the prosecutors a huge built-in advantage over the defendant in plea bargaining and in trial preparation.

First, the prosecutors seize as much of a defendant’s assets as they can get away with, including the defendant’s life savings — this is money not available to the defendant to fund his defense. Then, they force a defendant into the incredibly expensive task of trying to defend himself against the wealthiest entity in the world, the U.S. federal government. As one Enron defendant told me:

“Fighting the federal government cannot be done halfway. To have any chance at all of defending yourself, you must decide that you are willing to put everything on the line, including everything you have earned over your lifetime. You must do this because you know you are fighting an organization without a conscience which wants only to win, and it will do anything it can get away with to beat you. Guilt or innocence, right or wrong, justice, the facts … these are of no concern to federal prosecutors after an indictment has been brought — they only want your scalp.”

A defendant knows that, if he actually exercises his Constitutional right to defend himself, he is likely to lose most or all of his life savings — this is true whether the defendant wins or loses at trial or in the appeals court. As I wrote in an earlier post, “being a prosecutor means never having to say you’re sorry.”

Is it any wonder that trial by jury is so rare? It should be a national embarrassment that 97% of all federal cases pursued by the Department of Justice (DOJ) last year were resolved by guilty pleas, not by trials. In the American system of justice, a defendant must be bold, almost to the point of rashness, to try to defend himself at trial — just getting to trial is likely to impoverish his family. A plea bargain deal is simply good economics for most defendants — pleading guilty of some crime is usually the best practical decision for a defendant, even when he is innocent.

Let me give you three examples of the Feds’ use of impoverishment in the Enron Broadband Services (EBS) cases.

Michael Krautz, an accounting executive at EBS, was acquitted of all charges after two trials. Michael not only lost his savings, but he also went into debt defending himself — and when he was exonerated, he was still in debt.

Scott Yeager, a marketing executive, won acquittals at trial and then was re-indicted by the Feds and threatened with a second trial. Scott eventually had all charges dismissed based on an appeals victory at the Supreme Court. However, even in “victory”, Scott could not recover his life savings, most of which were lost in his defense.

Rex Shelby, a software engineering executive, also won acquittals at trial and then was re-indicted by the Feds and threatened with a second trial. Rex was ready and eager to go to trial, but exhausted all his life savings and could not afford the expense of a second trial. He entered into an obviously contrived plea deal — the deal itself was favorable to Rex. However, the tragedy of this example is that Rex wanted to go to trial to exonerate himself, but had been so impoverished by the Feds that he could not afford to do so.

These EBS examples are not rare — just about any attorney can give you lots of additional examples. Clearly, the strategy of impoverishment has served the federal government well, but has done so at the expense of justice and fairness.

Impoverishment is an extra-legal practice that needs to end. I will follow this post up with another post in which I propose some reforms for ending the practice of impoverishment.

About Enron Broadband Services (From The EBS Website)

This is the text that was on the Enron Broadband Services website:

About Enron Broadband Services
Enron Broadband Services (EBS) delivers the intelligent platform for the emerging Net economy: the Enron Intelligent Network™, which is a Pure IP™ broadband overlay to the Internet. We also provide rich multimedia ePower™ application services that enhance online commerce and communications.

We offer ISPs and content providers a range of bandwidth transport solutions that enable businesses to scale capacity quickly to handle high traffic and high bit rate needs. A wholly-owned subsidiary of Enron Corp. (NYSE:ENE), Enron Broadband Services is headquartered in Portland, OR and has offices in Houston, New York and London.

Our vision is to create an intelligent network platform that is optimized to deliver high-bandwidth products and services quickly and effectively, enhancing the way people conduct business online. Optimized for data and with intelligence designed directly into the network layer, the Enron Intelligent Network extends beyond the classic definitions of a static infrastructure of fibers, switches and billing systems. The Enron Intelligent Network is a dynamic communications environment designed to optimize high-bandwidth ePower application services.

Together, the Enron Intelligent Network and the ePower™ application services it delivers will extend and redefine the capabilities of the public Internet. We’re revolutionizing the types of information that can be efficiently sent and received, enabling businesses to communicate and collaborate more efficiently and effectively online.

EBS also provides bandwidth transport solutions to enable businesses to scale quickly and easily to meet the demands of high traffic, high bandwidth communications. Our solutions include bandwidth on the commodity market, dark fiber sales, and strategically located windows of fiber, Advanced Fiber Transport Solutions. Enron Broadband Services is delivering the platform for the emerging Net economy. We are rapidly building our Enron Intelligent Network-a global fiber backbone and data network — and furnishing this network with advanced, ePower™ application services for sale via our channel partners. By the year 2000, our backbone will cover approximately 20,000 miles and will carry data, video and multimedia content at speeds up to 10 gigabits-per-second (OC-192).

We serve carriers like Inter Exchange Carriers (IXCs), Regional Bell Operating Companies (RBOCs), Local Exchange Carriers (LECs), wireless data network providers and Internet Service Providers (ISPs). Enron Broadband Services serves major content providers and end users who expect more from the Internet. Our ePower™ applications and services are delivered over the most flexible, high-speed, reliable and fault tolerant network available, our Enron Intelligent Network.

Who are the People at Enron Broadband Services?
Our seasoned team of telecommunications, internetworking, and Internet experts come to us from such organizations as MFS/WorldCom, MCI, GTE, Netscape Communications, UUNet, Tektronics, US West Enterprise and Electric Lightwave. We are continuing to add energetic, enthusiastic professionals in all areas of the organization, including network engineering, operations, marketing and sales.

Best Enron Picture Ever

Michael Krautz hugs his mom after he’s acquitted. What a total sweetheart. He’s good people.

Stupidity Run Amok: Ken Rice and Kevin Hannon Slandered In Crazy Book

The other day I was waxing poetic about how awesome it would be for James Spader to play Jeff Skilling in a movie about Enron. I actually got the idea from watching the trailer for Brian Cruver’s “Enron: The Unshredded Truth”, which was just fantastical and crazy. It was like Corporate America on peyote. Just so outrageous. Here’s the trailer:

Cruver’s book and movie didn’t even touch Enron. It was way too crazy to be believed, and even those who wanted to believe it didn’t – it just didn’t line up with the facts.

So tonight I was googling for something unrelated and came across some more crazysauce in the vein of Cruver’s book. I actually owned the book Broadbandits at one time but I never got around to read it, which was probably a good thing. Check out the crazy here:

I’ve spoken to people who know Ken Rice, and I can assure you, they do not think of him as a six year old in a forty-year old’s body. He is as self-possessed as the moon. Secondly, he watched cartoons during meetings? Nobody has ever mentioned this to me before, and let’s face it, if it were true, that would be awesome and thus, I’d have heard about it by now. Third, I’m not sure what’s wrong with wearing jeans and cowboy boots if that’s what the man wants to wear. Is this person appalled that Ken Rice wasn’t in a tux? That he dressed like a farmer? What? What’s the problem here? Fourth, it is true he went to work whenever he felt like it. He had been there for twenty years and had made Enron a ton of money. He was a little burned out, and wanted to play. Can’t blame him for that. Fifth, he did not marry Amanda Martin. Sixth, I hate this subject; it is so not our business. And by the way, I am sure he is the only person in the whole history of corporate America to fall for a coworker. Anyone who mentions this is just being a lascivious fucktard. Seventh, Kevin Hannon by all accounts is a very smart guy. I have no idea if he’s a know-it-all (I don’t think so, I’ve never heard that accusation before) but what bugs me is that every conversation about “know it alls” requires someone to NOT know it all. And that is usually the person making the accusation. Just saying. Eighth, I’m not sure how this moron can make the argument that Ken Rice and Kevin Hannon’s presence at Broadband would ensure it was a colossal mess because when they were in Wholesale, it was on fire. Both their careers had been one success after another. So maybe if you publish a book with real people in it – people with families and children and peers – you might want to be a little more careful about throwing around careless accusations. Ninth, the motorcycles. Lord have mercy. Why people get their panties in a twist about the motorcycles I will never know. First of all, the architect who built out the space suggested a metaphor for speed, thus the motorcycles were bought. Ken Rice did not buy them on his AmEx, the way some people have suggested. The architect did and Enron reimbursed them with a check. They cost $20,000 which was far less than other departments were spending on art. And tenth, that stuff about his cars just reeks of class envy. What business is it of anyone’s if he liked Ferraris? It always amuses me that people who don’t have money always think they would have spent someone else’s money better. No Ferraris! Just nice sensible Buicks. Whatever, dickface. This whole passage is just garbage — class envy, lies, and stuff that is none of your beeswax.

But the truth isn’t even relevant in this book. They’re on the warpath to create a narrative about Enron. Ken Rice is supposed to be a certain way, and if in real life he isn’t that way, well who’s gonna know about it, right?

UPDATE

Omigod, y’all, it gets even more ridiculous. Check this:

His Asian connections? I have no doubt that Ken Rice knows people all over the freaking world, but “his Asian connections”? Where would he have Asian connections? His whole life was spent at Enron in the Wholesale division. There weren’t any great big Asian assets – even Dahbol was in India and he had nothing to do with that. His Asian connections? This was really driving me nuts. Plus “SynerG” doesn’t sound like Ken Rice. I don’t know why but that just doesn’t seem right. He’s the dude who named “Enron Broadband Services”. He’d spell it out at least, and I don’t think he’d use the word “synergy” – a vague word – in the name of a new company.

So I googled.

Of course, Ken Rice is not using his vast “Asian connections”. This kindly looking gentleman from Minnesota who shares the name “Ken Rice” is President/CEO of “International SynerG Communications”.

That’s how awesome this book is. LinkedIn has busted him. Oh my god, I’m having so much fun with this, I might just keep reading and correcting that freaking book of lies all night.

Update 2
The Ken Rice from Minnesota has been president/CEO of the SynerG company since 1994. DO THE MATH. I’m enjoying this way too much.

Enron Year 2000 10-K Disclosure: Broadband

I found an interesting risk related disclosure in Enron’s Year 2000 10-K. It is regarding Broadband.

In 2001, Broadband Services expects to continue
to expand the commercial roll-out of its content service
offerings including video-on-demand.

There are literally hundreds of examples of statements like these (i.e., “forward looking statements”) spread through analyst conference books, financial disclosures, press releases and other media. Enron – and Jeff Skilling – were very clear about the status of Enron Broadband Services.

A version had been up and running since 1999. The company streamed the Country Music Awards, an Andre Agassi tennis match and a Drew Carey show. But like Rex Shelby said on the stand, “Software is not complete until it is obsolete.”

Yet prosecutors and even some ordinary folks still claim that the EIN was vaporware. It doesn’t make Enron look criminal; it makes the accusers look foolish.

Dish Launches Blockbuster Movie Pass

A mention of Enron Broadband Services has made me aflutter with nostalgia:

Dish Networks announced today that it will use the Blockbuster name and Blockbuster’s large number of premium content rental agreements with major studios to launch what it calls “a stream come true” online streaming service.

Oh my God. My heart is breaking. Project Braveheart… anyone?

Those who’ve followed Blockbuster’s history ought to know this technical limitation well. Blockbuster famously attempted at the 1999 Streaming Media East show, to launch a major online movie delivery solution, bringing together its very strong brand with a not-yet-infamous name: Enron Broadband Services.

Blockbuster saw the potential for online delivery to be a differentiator from other brick-and-mortar movie rental stores, but was hindered by the broadband limitations of the day as well as a partner-Enron Broadband Services-that proved to be almost as much smoke and mirrors as its parent company, which famously imploded.

Looking back at documents from the initial foray, long before Netflix even existed, I was struck by how similar the “pitch” was in 1999 to this week’s set of events, so it’s up to Dish to solve the Blockbuster problem that it faces even before its new service launches. It will be interesting to hear what technical solutions Dish suggests to address the inconsistency of broadband experiences across the United States.

How grotesque. Enron Broadband Services should have survived; its technologies, patents and ideas are being proven every single day. I guess I’m just a little bitter that the right people aren’t getting credit for it.

EBS Dictionary

I sent a note to Big asking for some definitions of terms for a big post I’m working on. Here are some of his answers:

EIN: Entirely In the Nude — sign on a Portland gentleman’s club

BOS: Brilliant Original Strategy — EBS business model

Rex Shelby: Legendary executive frequently appearing in the Enron Myth.

Pooling Points: Best places on a billiard ball to strike with a cue stick.

QoS: Quick on the Shot — Description of Joe Shelby’s skill with a six-shooter.

Clearly I won the man lottery with this nerd.

Let’s Get To Know David Reece

Two years ago, I wrote a “Let’s Get To Know” post about David Reece. One of his relatives asked me to remove it so I did out of respect; James Reece had passed away on January 17, 2010 after a hard fought battle with ALS and I didn’t want to cause his family any added distress.

Enough time has passed that I feel I can re-post it. I admit the wording is blunt but I don’t think it is gratuitously harsh. David Reece was a cog in the EBS machinery and so I think he’s certainly fair game.

David and James Reece are brothers who owned and ran DSG (Data Systems Group) which EBS acquired on November 30, 1999. EBS acquired DSG for the engineers, not for the Reeces who were considered the weakest people in the company. David Reece testified at the trial and had negative things to say about the Broadband Three. He was bitter because he wanted more money than he got (although he got millions for doing nothing). He admitted that he really had no hands-on role at all in BOS or any other technology, so he was not an effective witness. It is worth noting that during the trial, while his brother was testifying against him, Rex Shelby walked up to James, shook his hand, and chatted with him. So maybe James was not quite as eager to bear false witness as his brother.

Both Reeces were promoted by Ken Rice after the acquisition. David Rice became VP of Application Development. Both brothers were later demoted and pushed out of EBS.

Enron Broadband Services Trial Jury Note

Judge Gilmore Dubious of Ed Tomko’s Schedule

This exchange is just maddening. You have to believe me that it goes on for a while after this but I’m just too sick of the whole thing to post it all. It seems that Ed Tomko has another trial in New Jersey and thus needs more time to prepare for his client, Rex Shelby’s, trial. But Gilmore is incredulous. She simply refuses to believe that Ed Tomko could have a trial in New Jersey so she CALLS THE JUDGE to confirm that Ed Tomko is telling the truth.

This woman is loco.

Transcript of EBS Employee Meeting

From February 15, 2000, this is a transcript of the EBS employee meeting.

Joe Hirko led the meeting, and mentioned that Kevin Hannon was stepping in as COO. Then basically they went through a condensed version of the analyst conference that had happened the previous month.

Today In Enron History

On April 18, 2005, the first Enron Broadband Services (EBS) trial began. I have written about this trial many times before, for example, here. I think what I need to do today is put it in historical perspective.

John Kroger was the federal prosecutor who wrote the original EBS indictment, as well as five of the incredible eight superseding versions of the indictment. Yes, you read that correctly — the government had such trouble coming up with a description of a “crime” at EBS that they wrote an unbelievable nine version of the indictment! According to Kroger’s own words, he rushed to write the EBS indictments because his huge ego made him want to beat the other prosecutors in getting an indictment “on the boards”. Thus, Kroger is the main villain in the EBS prosecution tale — he is the guy who wasted taxpayer money and tormented the families of innocent men, all to serve his own ego which had been bruised when his girlfriend left him for another attorney.

At the time of the EBS trial, Houston, and the entire country, were at the height of the anti-Enron hysteria. The government, even though they had no factual case, was confident that the EBS trial would be a “slam dunk” for the prosecution because of the solid jury bias against Enron. The government was certain that the convictions they believed they would get at this trial would be a perfect segue to the future trial of Ken Lay and Jeff Skilling. The government had reason to be cocky — polls showed that about 90% of the jury pool believed that any Enron executive who was indicted was automatically guilty and should be convicted immediately. In addition, Ken Rice and Kevin Hannon, EBS’s CEO and COO, had given up their defense and entered into plea deals with the government because they believed that the anti-Enron bias was too great to overcome at trial. So the EBS defendants who were bold enough to actually defend themselves, Joe Hirko, Scott Yeager, Rex Shelby, Kevin Howard, and Michael Krautz, faced incredibly long odds at trial.

However, the shallowness of the government’s case became apparent with their first witness. Shawna Meyer, a journalist major, was the lead prosecution witness — the government tried to use her to explain technology to the jury — she attempted to define terms such as “router”, “server”, “network”, etc. As I read the transcript of her comments, they are just laughable. And all the rest of the government’s witnesses had similar issues — they are like a rogues gallery of the EBS rejects: John Bloomer, a guy who tried to steal EBS technology and was fired; Bill Collins, an unbalanced liar who accomplished nothing at EBS but wanted a raise anyway and who was fired; David Reece, a guy who commented on technology but then admitted he had no actual technology role at EBS and was fired.

And then the defense witnesses spoke out: Larry Ciscon, the Rice University PhD software engineer who created the EBS technology in question and had authored a patent on it; Mark Palmer, the head of application development at EBS who was intimately familiar with the technology; Ellis Giles, the software engineer who actually wrote the software code which the government claimed did not exist; David Leatherwood, the engineer who headed the construction of the physical EBS network and facilities; etc. Even the most biased of jurors surely could see the obvious distinction between the credibility of the prosecution and defense witnesses.

But the coup d’etat for the defense was the defendants themselves — they turned out to be compelling witnesses in their own defense. Rex Shelby went first, a brilliant move by the defense team because it set a good tone for the entire trial. People tell me that Rex was eager to take the stand and that he was relaxed, natural, and totally un-intimidated by lead prosecutor, Ben Campbell, who cross-examined him on the stand. I am told Rex’s performance emboldened the other defendants and set the pattern for their testimony.

The trial lasted until mid-July when the jury returned from their deliberations with zero convictions, a number of acquittals, and many hung counts. I hear through the grapevine that the jury was very close to complete acquittals of the three technology defendants, Hirko, Yeager, and Shelby. So the trial was an unmitigated disaster for the government. So spooked was the government by the EBS experience that the it stipulated before the Lay/Skilling trial that it would not even get into the subject matter of the EBS case at the Lay/Skilling trial!

There are so many stunning moments in the EBS trial that I suspect that we will be hearing a lot about it, and the EBS case in general, over the next couple years. The EBS tale would make a great film. With a movie version of “Atlas Shrugged” about to be released, maybe it is time for a film about real businessmen being hounded by the an incompetent and arrogant government!