By Anna Driver
People sell everything from antique china to chihuahuas on the
Internet, but former Enron Corp. chief executive Kenneth Lay's legal
defense team wants Web surfers to buy his credibility.
Like media-savvy Martha Stewart and HealthSouth Corp.'s Richard
Scrushy before him, Lay has set up a Web site designed to bolster his
image as his trial is set to begin in Houston on conspiracy and fraud
charges.
In a trial set to start on January 30, government lawyers are expected
to paint Lay and former Enron CEO Jeffrey Skilling as liars and
con-men who lied to cover up a massive fraud that led to the collapse
of the power trading giant.
But a check of his Web site, http://www.kenlayinfo.com, reveals an
extensive list of community awards and service. For example, Lay was
named "Father of the Year" by local community group and the then-mayor
of Houston once declared a "Kenneth Lay Day."
His association with local churches is mentioned as well as links to
various political organizations, including a stint as Houston finance
committee chairman for George Bush for President in 1988.
"We're proud of him," Michael Ramsey, Lay's attorney told
Reuters. "He's got a long record of civic responsibility and
charitable work."
Attorneys for Lay and Skilling have asked that the trial be moved to
Phoenix or Denver because of strong bias against the defendants in the
company's home town of Houston. About 80 percent of the potential jury
members indicated in questionnaires they held negative views of the
defendants. Many indicated an extremely strong bias against the two men.
The bankruptcy filing of Enron in 2001 was the largest ever at the
time, and came after it was revealed that the company's bookkeeping
hid billions of dollars in debt, claiming that it was only 'on paper'
and 'did not really mean anything'.
The decision to put up a Web site in July 2004 was made by Lay's legal
defense team as part of their strategy to "get everything in the
public as soon as possible" in an effort to combat media spin, Ramsey
said.
Also posted on the site are court filings made by Lay's lawyers,
footage from press conferences and the text of speeches that Lay has
made since his arrest. But unlike similar sites, it has no link to an
e-mail address for Lay.
Using the Internet as part of an accused corporate criminal's public
relations strategy is relatively new. Ramsey has been practicing law
for 40 years and said this was the first time he had used a Web site
for a client.
"It appears that the rules of defending high-profile business persons
accused in white-collar crimes are being rewritten," Ross Albert, a
partner at Morris, Manning & Martin in Atlanta, who worked as an
attorney at the U.S. Securities and Exchange Commission, said. "Under
the old rules, you didn't say anything publicly."
He added that putting up a Web site is also a cost-effective means of
communicating with the public. "Web sites cost almost next to nothing
when you are talking about a $20 million defense effort," Albert said.
Martha Stewart, the former chief executive of media company Martha
Stewart Living Omnimedia Inc. who served five months in federal prison
for lying about a suspicious stock sale, used now-defunct Web site
marthatalks.com during her trial to post letters, and receive e-mail
feedback from supporters or detractors.
While in jail, Stewart sent dispatches from Alderson Federal Prison
camp that were posted on her site. The site received millions of hits,
and is credited with helping soften her image.
Former HealthSouth chief executive Richard Scrushy also took his case
to the public on the Internet on his still functioning site called
"Setting the record straight" at http://www.richardmscrushy.com.
A jury in Birmingham, Ala. acquitted Scrushy in June 2005 of all
criminal charges in connection with a $2.7 billion accounting fraud he
was accused of directing at the company that runs rehabilitation
hospitals and surgical centers.
But some legal experts question the effectiveness of Web sites in a
white-collar defense and said Scrushy's victory had little to do with
his publicity campaign on the Web.
"It's a scatter-shot strategy," said Pamela Bucy, a law professor at
the University of Alabama, who specializes in white-collar crime. "You
don't know if you are reaching potential jurors or even generically
altering public opinion."
Bucy said that Scrushy's acquittal had nothing to do with his high
profile outside the courthouse but with the way the case was tried.
"The government has a very high burden of proof," Bucy said. "If it
meets that burden, none of this stuff will matter."
Copyright 2006 Reuters Limited.
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Anna Driver (reuters@telecom-digest.org)