Judge limits testimony in Enron chiefs trial

Jan 12, 2006 — HOUSTON (Reuters) - A federal judge ruled on Thursday that jurors at the trial of former Enron Corp. chiefs Ken Lay and Jeffrey Skilling will hear only limited testimony about Enron's manipulation of California energy markets but not about the extramarital affairs of potential witnesses.

In a hearing ahead of the trial set to begin January 30, U.S. District Court Judge Sim Lake said the prosecution could not discuss at trial some evidence that showed Enron's role in manipulating California energy markets during the 2001 power crisis.

Defense lawyers had argued that material was not relevant to the seven charges facing Lay, the company's former chairman, or 35 charges facing Skilling, the former chief executive, in connection with Enron's 2001 collapse.

Enron agreed to settle charges for $1.5 billion that it manipulated power markets in California during the 2000-2001 energy crisis that caused rolling blackouts in the state.

However, the judge sided with prosecutors in ruling that the defense lawyers could not question government witnesses about their extramarital affairs or pornography and drug use.

Judge Lake agreed with Lay that a 1987 oil trading scandal that the former Enron chairman allegedly covered up was also not relevant to the charges he now faces.

Lay's lawyer, Michael Ramsey, said Lake's denial of several other government motions that would have limited defense testimony had greatly helped his client.

"We have got the elbow room and the latitude we want to open the case up robustly," Ramsey told reporters after the hearing.

Judge Lake has not yet ruled on a motion by Lay and Skilling to move the trial to Atlanta, Phoenix or Denver because of strong bias against the defendants in the company's hometown.

About 80 percent of the potential jury members indicated in questionnaires they held negative views of the defendants.

Lay and Skilling had argued the heavy media coverage of former Chief Accounting Officer Richard Causey's plea deal with prosecutors last month could further influence jurors.

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