Enron Jury May Weigh Intentional Ignorance

Jurors in the trial of Kenneth L. Lay and Jeffrey K. Skilling will be instructed to consider whether the two former Enron Corp. executives deliberately ignored accounting fraud as the energy trader fell into bankruptcy, the judge in the case ruled Wednesday.

U.S. District Judge Sim Lake denied a motion by defense lawyers to prevent the jury from considering whether Skilling or Lay can be found guilty if either deliberately chose not to know about alleged criminal activity at Enron. At a hearing in federal court in Houston, Lake didn’t say what the precise wording of his instructions to the jury would be.

Another former top U.S. executive charged with accounting fraud, WorldCom Inc. founder Bernard J. Ebbers, has appealed his conviction partly on the ground that he was unjustly convicted because of the same jury instruction.

“That is clearly the biggest issue,” said Skilling’s lawyer Daniel M. Petrocelli, referring to the judge’s instruction, after the hearing. Lay, 64, and Skilling, 52, are accused of defrauding investors by misrepresenting Enron’s finances. Both men face at least 25 years in prison if convicted.

At a hearing on Ebbers’ appeal before the U.S. 2nd Circuit Court of Appeals in January, his lawyer argued that the trial judge should not have instructed the jurors that they could convict Ebbers if they found he intentionally took steps to avoid learning of an $11-billion accounting fraud at the company. The court has not ruled on the conviction.

Lake will instruct the jurors Monday in what legal issues they may consider when judging the two Enron executives.