Thursday, January 19, 2006

Spinning the Media

There is an interesting phenomenon recently in which defendants charged in white collar crime cases have been speaking out in the press about their cases and asserting their innocence (or at least lack of guilt).  In a story in the New York Times (here) that could be titled "Extreme Makeover -- Defense War Room Edition," former Enron CEO Jeffrey Skilling discusses how he built the rooms in Houston that his O'Melveny & Myers attorneys are using to prepare the defense at his upcoming conspiracy and securities fraud trial.  The article includes a discussion of his purchase of bathroom tile shelves from Home Depot and tables from Ikea, interspersed with the far more important message from his attorney that Skilling plans to testify at trial.  Skilling also gave an interview to the Associated Press (story here) that is similar to the Times article. 

Skilling is not the only person to put his views out in public.  Co-defendant Ken Lay went even further in giving a speech (available here) to the Houston Forum in December in which he set forth his view that the "Enron Task Force investigation is largely a case about normal business activities typically engaged in on a daily basis by corporate officers of publicly held companies throughout the country."  Defendants normally do not telegraph their defense a month before trial, or attack the prosecutors as being misguided.

In the Wall Street Journal (here), Seymour Lazar discusses the fraud and conspiracy charges against him for allegedly accepting secret payments to serve as the representative plaintiff in class action cases.  Lazar asserts that the payments are not illegal but only "referral fees" from the attorneys. 

Going one step further, an AP story (here) states that the author of articles that portrayed Richard Scrushy in a sympathetic light during his trial states she was paid $11,000 by Scrushy in money that was funneled through other organizations.  The columns appeared in the Birmingham Times, a small newspaper that is the oldest African-American owned paper in the city, and Scrushy denies paying to have the stories written.  Assuming the jury adhered to the court's instructions, then the articles would have no effect on the outcome, but if stories were bought then it takes the issue of use of the media well beyond giving an interview to put forth one's side of the case.

For the Enron defendants, their public discussions are part of an effort to negate the effects of the widespread negative publicity surrounding the cases arising from the Enron collapse that cost a number of jobs in the area in which they will be tried.  Lazar's case portrays the various lawyers as prototypical sharks, and the article's discussion of his age and health problems will put him in a more sympathetic light.  Is it a good strategy?  It's hard to say at this point, of course, but in white collar crime cases the issue usually is not whether the person engaged in the conduct, but whether they intended to commit an illegal act.  Intent is inferred from circumstantial evidence, so a discussion of the facts of the case will rarely implicate a person in conduct that the government could not otherwise prove, and an assertion of innocence does not add much to the prosecution's knowledge of the case or provide much insight into the defense strategy.  With clients that are used to being in the limelight, it may be one way to allow them to regain a bit of their lost luster at what is likely only at most a modest cost to defending the case. (ph)

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