Kenny Boy’s worst nightmare

Poor Kenny Boy. This is not what he had in mind when he asked to have his trial separated from Skilling and Causey.

Ex-Enron Chairman Ken Lay will face two separate criminal trials — one with ex-Chief Executive Jeff Skilling and former top accountant Rick Causey and another by himself.

U.S. District Judge Sim Lake on Tuesday refused to separate Lay, Skilling and Causey into three trials as they had requested.

But Lake did decide that Lay’s four criminal charges relating to his personal banking activities should be tried separately from the Enron-related charges against the three former executives.

“This is Ken Lay’s worst nightmare. The government gets two bites at the apple,” said Jacob Frenkel, a Washington-based former federal prosecutor who has been following the case.

“First, it’s much easier to point fingers at people who aren’t sitting next to you in the courtroom, and second, if he’s convicted in one case and then faces the second, it becomes harder still for Lay,” Frenkel said.


David Berg, a Houston lawyer who has followed the case, said that “on balance, it’s bad news for Lay.”

Lay will now be contaminated by his co-defendants when he has far fewer Enron charges than they do, Berg said.

But he said the bank charges, similar to many he tried in the 1990s savings and loan cases, “can be very dangerous and easy to prove,” so Lay should be happy they are pulled out.

Berg said he suspects the judge will save the Lay banking charges for after the Enron case and they will never be tried. He said if Lay is acquitted, the government will likely not bother with the banking charges. And if Lay is convicted, the government will likely pursue a plea bargain.

Tom Kirkendall agrees with that assessment, and also points to this WaPo article on the Corporate Fraud Task Force, the federal prosecutors who are in charge of pursuing corporate criminals like Kenny Boy. It’s a pretty good read, so check it out.

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