HOUSTON — The court battle rarely stops when a jury renders a verdict.
More than two months after winning convictions against Enron Corp. founder Kenneth L. Lay and former Chief Executive Jeffrey K. Skilling, the Justice Department's Enron Task Force is smarting from a blow to its trial record dealt by the federal 5th Circuit Court of Appeals.
In a recent 2-1 decision, a panel from the court overturned fraud and conspiracy convictions against four former Merrill Lynch & Co. executives who participated in a sham 1999 deal that allowed Enron to book bogus profit.
Viewed alongside other Enron setbacks, some experts say, the Merrill decision highlights questionable government strategies. But they say bagging the Lay and Skilling convictions probably will define the Justice Department's performance in ferreting out Enron crimes.
"In a sense, this reversal underscores how the government also fell victim to the Byzantine nature of the Enron fraud," said Robert Mintz, a former federal prosecutor. "These were unprecedented crimes to which the government responded with some very aggressive and largely untested theories of prosecution.
"In the end, the government got their men in the form of Skilling and Lay. That will likely be what everyone remembers when they think of Enron," Mintz said.
Enron, once the nation's seventh-largest company, spiraled into bankruptcy proceedings in December 2001 amid revelations of hidden debt and inflated profit.
The Justice Department formed the task force to launch a sprawling investigation that produced 16 guilty pleas from former Enron executives.
Mintz said that when the government stuck to basics, like testimony in the Lay-Skilling trial from eight of those ex-executives who had pleaded guilty to crimes as well as others who witnessed criminal behavior, prosecutors were successful.
But earlier cases show spotty success. Last year, a flawed jury instruction promoted by prosecutors prompted the U.S. Supreme Court to reverse former Enron accounting firm Arthur Andersen's 2002 conviction on obstruction of justice.
Although an appellate panel called Andersen a member of Enron's "supporting cast" for destroying tons of Enron documents in late 2001 as investigators started probing the energy company, the instruction allowed jurors to convict without finding criminal intent.
