Closing arguments begin

The prosecution began presening its closing arguments in the Ken Lay/Jeff Skilling trial yesterday, saying the former Enron executives were "masters of the cover story" who lied repeatedly to shareholders and the public. Prosecutor Katheryn Ruemmler told jurors that Lay and Skilling relied on "accounting tricks, fiction, hocus-pocus, trickery, misleading statements, half-truths, omissions and outright lies" to cheat and steal from Enron's shareholders, the true owners of the company:

"They were the owners of Enron. It was their Enron. It wasn't Mr. Skilling's Enron, it wasn't Mr. Lay's Enron," she said. "The owners of Enron were cheated . . . were stolen from. They were profoundly harmed," by the defendant's choice to tell lies rather than "come clean" about the true value of the company.

Ruemmler blasted Lay and Skilling's central argument that they didn't know anything bad was happening at Enron — and even then, that former CFO Andy Fastow and a couple of his cohorts were the people really responsible for bringing the huge energy company down. "You can't stretch the truth that far," she said, showing the jury a series of slides quoting Fastow, former Treasurer Ben Glisan Jr. and other witnesses. One of the slides showed a quote from Lay, which the prosecution also mounted on a board and displayed throughout Monday's four hours of arguments: "Rules are important — but they should not — you should not be a slave to the rules either," the quote read.

Another part of the argument involved walking the jury through situations at several of Enron's business divisions, with Ruemmler claiming Lay and Skilling told outsiders a different story from what was actually happening. A cornerstone of the prosecution's case has been that the two executives knew Enron's financial health was failing, but they lied about the situation to outsiders. In one of Ruemmler's examples, she highlighted negative comments Skilling made to employees in the failed broadband division in March 2001, then positive remarks he gave analysts about a week later. "This is black and white. Two incredibly different messages. One for the outside and one for the inside," Ruemmler said.

Lay and Skilling managed to make it through the presentation without leaping over the table and strangling Ruemmler, though the Chronicle reported that Skilling once looked like he was about to rise and object to something she was saying and Lay "looked disgusted at least once." Skilling had some run-ins with prosecutors under cross-examination, and Lay tangled with nearly everyone during his time on the stand.

Today, defense lawyers Daniel Petrocelli and Mike Ramsey will present the defense's six hours of closing arguments, followed by two more hours from the prosecution on Wednesday. After that, the case will be sent to the jury.