Trial, Day 6: Tapes, tapes, tapes

Much of Wednesday's episode of the Ken Lay/Jeff Skilling trial was taken up by a February 2001 webcast to Enron employees and tapes of two 2001 telephone calls, all made while the company was on its way to collapse. Local media picked up on the irony of the webcast, in which Lay and Skilling predicted Enron would be "the world's leading company" by 2006.

"We want to move from being 'the world's leading energy company' to be 'the world's leading company,' " then-CEO Skilling said to applause from employees. He noted he would change his vanity license plate from "WLEC" to "WLC."

"Five years from now I think there's a good chance we could be the leading company in the world."

So things didn't turn out quite like they predicted. Houstonist wonders what Skilling's vanity plates say now.

Also on Wednesday, ex-head of investor relations Mark Koenig backtracked a bit on his earlier testimony that indicated Skilling, the former Enron CEO, knew about and approved cooking the company's books to meet analysts' and investors' expectations and keep stock prices high. Koenig testified last week that Skilling didn't publicly disclose that $230 million in debt had been moved from Enron's retail section to the wholesale division, a move Koenig said was designed to hide losses and make Enron's faltering retail component seem more profitable. Under cross-examination by Skilling's lawyer Daniel Petrocelli, Koenig said he didn't really know what Skilling was thinking when he made the decision.

Petrocelli used the tapes of the two phone calls to establish the idea that Enron was the victim of short sellers who worked to bring the company's stock price down in 2000 and 2001. Petrocelli seems to be indicating that short-selling ultimately led to a "run on the bank" at Enron, which in turn brought the company down — in line with the defense's strategy that everything was just fine at Enron until the company collapsed. Tough the defense frequently argued last week that the jury should hear entire conversations on tape, not just portions of them, Petrocelli skipped a section of tape yesterday in which Skilling answered questions from employees about Enron's unpopular "rank and yank" peer-review system. We guess it's important to play the entire tape as long as it doesn't make the defendants look bad.

Lay's lawyer, Mike Ramsey, will probably take over cross-examination of Koenig today, and then there's espected to be another hour of questions from prosecutor Kathryn Ruemmler. Given that, the next witness — Ken Rice, the former co-CEO of Enron's broadband division — probably won't take the stand until next week.