Did prosecutors mishandle Skilling evidence?

Does the latest appeal by former Enron chief executive Jeffrey Skilling to overturn his May 2006 conviction stand a chance? It depends on who you ask, but the proceedings scheduled for today (2 April) in New Orleans before a three-judge panel in the 5th US Circuit Court of Appeals are sure to be lively. The big question to be argued: did prosecutors mishandle key evidence before Skilling's trial?

Last month Skilling's legal team, led by O'Melveny & Myers' Daniel Petrocelli, filed a supplemental appeal accusing prosecutors of failing to disclose more than 400 pages of FBI interview notes. The notes allegedly contain contradictory statements from former Enron chief financial office - and US Government witness - Andrew Fastow.

"The failure to turn over [Brady v Maryland] or exculpatory material with respect to Fastow is extraordinarily serious if it's true," says Ira Lee Sorkin, a Dickstein Shapiro partner who defended former Merrill Lynch managing director Robert Furst in the Enron "Nigerian Barge" case. (The 5th Circuit threw out Furst's conviction on wire fraud and falsified business records charges in August 2006.)

The prosecutorial misconduct charge is only the latest salvo fired by defence lawyers, who first filed a 239-page appeal last September, alleging several other missteps in the Government's case, including flaws in the jury selection process and in the jury instructions.

The latest charges hinge on the FBI notes and the court most likely will have to review the documents - a highly unusual move for an appellate court, says Carl Tobias, a professor of law at the University of Richmond.

"It's just insanity for someone four years down the line to take notes from a preliminary conversation and try to reconstruct precisely what was said," says a former Justice Department staffer familiar with the case. "If this gets overturned, it would give new meaning to 'getting off on a technicality'."

But Enron convictions have been overturned before. The American Lawyer's litigation supplement from last fall, which reported on Justice's Corporate Fraud Task Force, covered several overturned guilty verdicts in both the Enron Broadband and Nigerian Barge trials. 

By Brian Baxter. A version of this article first appeared in The American Lawyer.