The defense teams for Enron Corp. founder Kenneth Lay and ex-CEO Jeffrey Skilling launched their attack on Monday, putting up a string of lower level ex-employees who countered bits of the testimony by some of the prosecution’s ex-Enron executives.

Joannie Williamson was the first defense witness called in the 10-week-old trial of Skilling and Lay. An ex-assistant to Lay and Skilling, Williamson testified she believed Mark Koenig, the company’s ex-investor relations chief and first prosecution witness, lied about his involvement in Enron-related crimes. She described Koenig, her former boss as a “close family friend.” Koenig pleaded guilty in August 2004 to aiding and abetting securities fraud, and he testified that he had lied to investors about Enron’s finances before it went bankrupt.

Williamson told jurors Koenig called her on the day he pleaded guilty.

“When I got to work that morning, I had a message on my voice mail, and it was from Mark, and he said that…he would be pleading guilty, and that he appreciated our support, and that he would be calling later that afternoon,” she told jurors. “I was stunned, I was hurt…Mark had always told me he did nothing wrong.” She said Koenig also called her later that day.

“I asked him…why did you plead guilty?” she asked. Koenig, she said, told her that “‘in order for this to work, everyone needs to believe that I am.'” Koenig, in sometimes emotional testimony in February, told jurors, “I pled guilty because I am guilty” (see Daily GPI, Feb. 8, Feb. 7).

In cross-examination, prosecutor Kathryn Ruemmler asked, “Are you saying that Mr. Koenig lied? He perjured himself?”

“Yes,” Williamson answered.

“Do you understand that good people, honest people, sometimes do bad things?” Ruemmler asked.

“Sometimes they make mistakes,” Williamson answered. She added, “I think he was in a position where he did what he had to do, and he did it.”

The defense strategy appeared to focus on specific issues raised by prosecution witnesses, and most of those testifying spent little time on the stand. Two former Enron Energy Services (EES) executives Scott Stoness and Diann Huddleson were called to counter testimony by David Delainey, the former CEO of EES and another ex-EES executive, Wanda Curry.

Delainey testified that in March 2001 he reluctantly agreed to a plan by Skilling to move part of EES into Enron North America to hide $200 million in 2Q2001 losses (see Daily GPI, March 1). However, Stoness told jurors Enron did not know until May 2001 how high EES’s quarterly losses would be; the losses eventually totaled $170 million.

Huddleson also sought to portray EES as a well-functioning unit, countering testimony by Curry, who said EES was in disarray in late 2000 and into 2001. Huddleson, who handled the California utilities for Enron, testified she regularly tracked payments for what the utilities owed Enron during California’s energy crisis in late 2000. Huddleson said most of the utilities’ payments to Enron were done electronically, and she said she kept track of all outstanding balances — something Curry said was not done.

Rogers Herndon, former vice president of Enron North America, was in charge of assessing the risks of transferring the EES unit into Enron North America, the profitable wholesale trading arm, and he testified the transfer was a good business decision. He also said no one had ever asked him to try to hide the unit’s losses.

The move allowed “EES to do what it did best, which was sales, and wholesale to do best what it did best, which was risk management,” Herndon testified. The move also provided “efficiencies” for both units. Under cross-examination by Sean Berkowitz, Herndon acknowledged that he was only one of many analysts, and he said there were differing opinions about the value of moving EES into the trading arm.

Lay and Skilling are both expected to testify in their defense, and the defense has indicated Skilling could take the stand in the next week.

Lay’s lead lawyer Mike Ramsey, 65, was not at the trial on Monday. Ramsey had a stent placed in his heart two weeks ago, and some outpatient tests were performed in Houston, according to Lay publicist Kelly Kimberly. She said there appeared to be “some difficulty” with the stent, but she said, “We are optimistic that Mike will be back at trial soon.”

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