May 02, 2005
Oh, *that* video

Remember that defense claim from Friday in the Enron Broadband trial that a videotape shown by the prosecution was never shown to stock analysts? Well, it turns out the defense was right.

Watching two videotapes simultaneously today, jurors in the Enron Internet trial learned that prosecutors previously presented an inaccurate version of a stock-analyst conference that's key to the government's case.

While ex-CEO Jeff Skilling could be seen talking in unedited raw video from the actual January 2000 conference that's at the heart of the criminal accusations, next to it the government's edited evidence tape instead cut from Skilling to show one of the defendants addressing the conference.

The prosecution's star witness, Ken Rice, testified today that he now realizes the government showed him something other than the actual conference tape. The former CEO of Enron Broadband Services said that led him to incorrectly testify that the controversial segment from defendant Rex Shelby was shown to analysts at the conference.

Prosecutors had introduced the video, with the brief Shelby segment included, to support their claims that executives lied to analysts about the capabilities of EBS' technology at the conference to inflate the company's worth. The stock price rose within a day of the conference from $54 a share to $72 a share.

Rice said he'd seen the government's video before testifying. When prosecutor Ben Campbell showed it to him in court Tuesday, Rice testified then that he was surprised that Shelby was talking about the network operating system as up and running when it wasn't.


In questioning from defense attorney Tony Canales, Rice said he knew Shelby had taped the segment in question and that it was slated to be shown to the analysts.

Rice told Canales he thought about this a lot of over the weekend and even talked to his Washington, D.C.-based lawyer about whether he'd been shown the wrong tape and convinced himself he did see the Shelby segment shown at the analyst conference.


"It's very serious when the government offered something in evidence that turns out to be phony," said Mike Ramsey, the lawyer for ex-Chairman Ken Lay. Ramsey and Skilling's lawyer Daniel Petrocelli have been in court watching the Rice testimony, which could be repeated in their clients' trial next year.

Ramsey said the government has all the raw footage of the conference and it "knew or should have known that their edited version didn't match reality."

Prosecutors haven't yet explained how the false information got before the jury. They are expected to call a witness to the stand who supplied the edited tape to the government with the Shelby segment in it.

Well, now. As far as I can tell, this is the first major screwup that the Enron Task Force has committed. It's understandable that things can slip through with all the mounds of evidence to examine, but this is one of those Things Which Should Not Happen.

Tom has this story as well, and he thinks the prosecution can clean things up on redirect by admitting they goofed and getting witness Rice to reaffirm what he'd said before. Nobody's perfect, and there's plenty of other evidence to go around, right? I'm sure that's approximately what they're hoping. I'll be very interested to see how it plays out. Stay tuned.

Posted by Charles Kuffner on May 02, 2005 to Enronarama | TrackBack

I'm very frustrated by this screwup. I knew the first time I heard about the EBS-Blockbuster stuff that either those guys were crooked or they were criminally stupid. I'm just hoping the stupid prosecutorial error doesn't result in an acquittal.

Posted by: Ginger Stampley on May 3, 2005 8:51 AM