Witness tells Enron court boss felt pressured on plea

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The first defence witness in the Enron fraud trial testified on Monday that a key government witness pleaded guilty in spite of professing his innocence to her.

Joannie Williamson, a former Enron co-ordinator in investor relations, said Mark Koenig, her former boss and a close friend, told her he had pleaded guilty to aiding and abetting securities fraud in a plea agreement that required he testify for the government in return for a lenient sentence.

“I was shocked, stunned, hurt because Mark had always told me he had done nothing wrong,” she said.

Ms Williamson said he admitted he was not guilty but had said: “In order for this to work everybody needs to believe that I am.”

The testimony bolsters the defence’s argument that prosecutors pressured 16 innocent former Enron employees into pleading guilty to crimes in connection with Enron’s bankruptcy. In return, the defence says, they were offered leniency to testify against the defendants.

Kenneth Lay and Jeffrey Skilling, Enron’s former chief executives, are on trial for more than 30 charges, to which they have pleaded innocent. Prosecutors rested their case last week, after two months of testimony by government witnesses that the defendants hid Enron’s deteriorating financial position while enriching themselves.

Several other defence witnesses took the stand on Monday, including Rogers Herndon, a former Enron risk management expert, who testified that moving the risk management functions from one Enron unit to another was not aimed at hiding losses, as prosecutors had argued. He said he had asked for a greater challenge, and was asked if he would take on the additional responsibilities. “There were definitely efficiencies created in this process,” Mr Herndon said.

The defence had to begin its case without Mike Ramsey, Mr Lay’s chief lawyer, who is to be hospitalised on Tuesday.

■ Separately, Enron distributed $4.68bn to creditors owed $51bn. The amount brings the total paid to Enron creditors to $5.83bn, it said. Enron plans to pay creditors about 18-20 cents on the dollar in twice-yearly payouts by the time all claims are dealt with.

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