Legal News

For Skilling?s Appeal, How Key Are the Fastow Notes? Gov?t Says Not Very

By Dan Slater

As the Journal’s John Emschwiller noted last week, there’s a new twist in ex-Enron CEO Jeff Skilling’s appeal, slated for a hearing in New Orleans next week. Skilling’s lawyer, Dan Petrocelli, is arguing the government failed to turn over what he’s characterizing as exculpatory notes from a key witness, former CFO Andy Fastow. Yesterday, the government came back at Petrocelli with its response.

Team Petrocelli is alleging that more than 400 pages of FBI notes of interviews with former Enron CFO Andy Fastow — which were only recently turned over to Petrocelli in their entirety — show inconsistencies and contradictions between Fastow’s early statements and his 2006 trial testimony. In a supplemental brief, filed earlier this month, Petrocelli called the newly-revealed evidence “a sledgehammer that destroys Fastow’s testimony” and ruins the government’s entire case against Skilling. He wants the 5th Circuit to erase Skilling’s 19 convictions and block the government from trying him again. (Here’s another report from the Economist.)

Yesterday, the government said Petrocelli is relying on “on isolated snippets culled from 420 pages of handwritten notes and stripped of their context.” If “divorced from Skilling’s hyperbolic rhetoric, each portion of the notes on which Skilling relies contains information that Skilling possessed prior to trial or that would have had minimal value” in skewering Fastow’s testimony, the government said. Here’s the report from the Houston Chron.

In the trial, Fastow said that there were secret agreements that a Fastow-run partnership wouldn’t lose money if it bought troubled Enron assets to boost the energy company’s earnings. Fastow testified that he and Skilling discussed Fastow’s list, nicknamed the Global Galactic, that noted undocumented side deals between Fastow’s partnership and Enron. The FBI notes, however, say Fastow “doesn’t think (he) discussed the list with JS” the Chron says.

In the “we aim to please” category, per readers’ requests, here’s Petrocelli’s filing. (Gov’t response linked above.)

Full post as published by Law Blog - WSJ.com on March 26, 2008 (boomark / email).