Friday, July 1, 2005

Enron Defendants Allowed to Subpoena Records From Defense Attorneys About Government Directions Not to Cooperate

U.S. District Judge Sim Lake granted a defense motion made by Enron defendants Ken Lay, Jeffrey Skilling, and Richard Causey -- filed ex parte with the court -- to permit the issuance of subpoenas under Rule 17(c) to the 15 cooperating witnesses who have entered into agreements with the government to determine whether prosecutors on the Enron Task Force have directed them not to cooperate with the defendants.  Judges are usually quite reluctant to permit defendants to issue document subpoenas because, in the words of the Supreme Court's decision in Bowman Dairy v. U.S., "Rule 17(c) was not intended to provide an additional means of discovery" beyond that provided by Rule 16.  The standard rationale for denying the defense request to issue subpoenas is that defendants are not permitted to embark on a "fishing expedition" and must show the documents sought meet the evidentiary requirements for admission at trial.  Because the motion was filed ex parte, even the government does not know the exact basis for the defense claim that prosecutors have thwarted the defendants' efforts to gather information.

Even more surprising than authorizing the subpoenas is that the recipients are the attorneys for the various cooperating witnesses, and they are required to furnish all documents, including e-mails, related to any direction from prosecutors not to cooperate.  The  scope of the subpoenas will surely draw privilege and work product objections from the lawyers, so this battle may last for quite a while, assuming there are even records related to the subject. 

Tom Kirkendall on the Houston's Clear Thinkers blog has a post (here) noting that the Enron Task Force appears to have engaged in a pattern of threatening witnesses who have cooperated with the defense in both this case and the other Enron-related prosecutions (Nigerian Barge and Broadband Services).  Tom writes:

the Enron Task Force has been quite successful in the court of public relations in painting anyone having anything to do with Enron as a criminal. However, in actually having to prove its allegations in court (as Professor Ribstein notes in this post from yesterday), the Task Force has been far less successful and now it appears that one federal judge is openly skeptical of the tactics that the Task Force has been using to deter defense witnesses from testifying and to generate dubious testimony under plea arrangements. That government prosecutors believe that they cannot prevail in their prosecutions of Enron-related criminal defendants without engaging in such troubling tactics is more strong evidence that the government's policy of criminalizing business transactions has gone seriously awry.

Whether or not the subpoenas yield any evidence, the defense motion indicates that one strategy will be to "put the government on trial" by questioning witnesses about threats or promises made to them to keep information from the defense. 

Although the trial is still over 6 months away, it will be interesting to see if any lessons can be drawn from the Scrushy acquittal.  Lay is probably in the position most analogous to Scrushy, and he has already advanced an "Honest-But-Ignorant CEO" position in his public statements.  The fact that Scrushy did not testify and, based on juror statements, was able to undermine the parade of cooperating witnesses through cross-examination may become a template for the defendants.  One difference for Lay, Skilling, and Causey, however, is the greater volume of documentary and testimonial evidence of their involvement in certain decisions and meetings, which may compel one or more to testify.  This is a little like talking about next year's Super Bowl, it's all so far away, but it will be upon us soon. 

A Houston Chronicle story (here) discusses the defense motion and Judge Lake's ruling. (ph)

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