Four years after the name Enron became a byword for self-destructive corporate scandal and greed, the company founder and its former chief executive will tomorrow face a jury at the start of a fraud and corruption trial seen as a test case of the US justice system's ability to prosecute serious white-collar crimes.
The personal disgrace of Kenneth Lay, once a close confidant of President Bush, and his latter-day company boss Jeff Skilling is already complete. In the public imagination, they are widely viewed as unscrupulous and voracious corporate raiders who paid out vast share bonuses to themselves and maintained a veneer of robust corporate health even as their company was collapsing under the weight of phantom accounting figures and off-the-books investment schemes gone awry.
Enron, once the seventh-largest US corporation, went up in smoke virtually overnight in late 2001, leaving investors billions of dollars out of pocket and depriving its employees of their jobs and pension plans.
The Texas company also blew a huge hole in the economy of Houston, where it had lent its name to the ballet, the opera, the baseball stadium and a big medical clinic.
For all the public condemnation, though, it is far from certain whether federal prosecutors can make their charges stick and send Messrs Lay and Skilling to prison for the rest of their lives, as they hope. The evidence risks becoming highly complex and technical, and it may be far from simple to prove beyond a reasonable doubt who exactly was responsible for which part of the Enron debacle.
One Enron-related trial collapsed, in part because the jury got lost in the evidence. Convictions secured against Andersen, the Enron accountants who went out of business, were overturned on appeal.
The prosecutors' best shot probably lies with the Enron executives who have already pleaded guilty to a variety of crimes and are now prepared to take the witness stand against their former bosses. These include Andrew Fastow, the former chief financial officer now serving a 10-year prison sentence after admitting he set up off-the-books overseas partnerships as a way of massaging company results to meet shareholder expectations, evading income tax and hiding debts.
They also include the company's former chief accounting officer, Richard Causey. He signed a co-operation agreement last month and admitted securities fraud.
The defence is likely to use the notoriety of these witnesses, and the fact that they agreed to testify to help ease their punishment, as a way of casting doubt on their credibility.
Mr Lay set out his stall for the trial in a remarkable speech to the Houston Forum Club last month, during which he cited Winston Churchill to assert that the truth was on his side and that prosecutors were out to get him no matter what. "Two separate Enron taskforce teams spent two years looking at everything related to me and my wife, Linda," he said. "These first two teams, despite exhaustive efforts, found no basis for indicting me. In my mind, it was really quite simple. They did not find a crime because there was no crime."
Mr Lay has argued many times that he was no more than a figurehead in Enron's final years, that he trusted what he was told by the company's lawyers and accountants, and that the bulk of the wrongdoing was the work of an out-of-control Mr Fastow working essentially alone.
The prosecution is expected to focus on inconsistencies in Mr Lay's public statements. The period after Mr Skilling's resignation in August 2001, when Mr Lay took over the chief executive spot, is where he is likely to prove most vulnerable. In a 26 September conference call, for example, he said: "The third quarter is looking great. We will hit our numbers."
The government alleges he knew this was not the case, as do many angry investors. One shareholder famously confronted Mr Lay after he had issued one of his many denials and asked: "Are you on crack?"Reuse content