Trial, Day 31: The prosecution rests

Prosecutors rested their case against former Enron executives Ken Lay and Jeff Skilling yesterday, asking Judge Sim Lake to drop three charges against Skilling and one against Lay.

The dropped charges against Skilling concern a 2000 deal, Project Greyhawk, which prosecutors say the ex-Enron CEO and others created to take advantage of an anticipated jump in Enron's stock price. But to prosecute those allegations, the government would have had to get into the business of Enron's broadband division, which is technical and would have complicated the trial. The dropped charge against Lay dealt with securities fraud allegations from a November 2001 conference call with analysts; prosecutors have instead focused on a Lay-led call from October 2001 in which they say he misled analysts about Enron's stability.

On Tuesday, the final prosecution witnesses talked about the money Skilling and ex-Chairman Lay made while they were at Enron — $152 million for Skilling between 1999 and 2001, and $223 million for Lay during the same time. And yet that might not have been enough for Lay, said witness Joanne Cortez, who oversaw the books for Lay's line of credit. Cortez said Lay sold millions of dollars in Enron stock shortly after Skilling left Enron in August 2001, which made her wonder if Lay was using his line of credit to turn stock into cash because he knew the company was in trouble. Lay used his stock to repay draws from the company line of credit; by the end of 2001, he had drawn $77 million but has so far repaid only $70 million. Cortez said the sale concerned her enough that she made a separate spreadsheet to track Lay's transactions and kept it under lock and key because she "felt that it wasn't public knowledge." Cortez later turned the information over to the FBI. Lay attorney Bruce Collins argued under cross-examination that Lay was experiencing "severe margin calls" and was drawing on his line of credit and selling stock to meet them.

When the trial resumes Monday, the defense's first witness will be Joannie Williamson, an ex-Enron employee who is expected to testify that Mark Koenig, the prosecution's first witness, told her he hadn't committed any crimes but the government pressured him to plead guilty.

Skilling lawyer Daniel Petrocelli, of Los Angeles, said he expects it'll take four to six weeks for the defense to present its case, and then "Mr. Skilling can get on with the rest of his life and I can get out of these cowboy boots."