Berkowitz Blows It – Enron Update

Instead of the anticipated sparks Sean Berkowitz finished his cross examination today with a whimper. The most anticipated part of the trail so far left Skilling undamaged and gave the impression the government was struggling to make its case. Berkowitz threw some curve balls especially by bringing up Skilling's investments in Photofete.

The Photofete business was easily refuted by Skilling’s lawyer Petrocelli. The investment involved was so small that Skilling just didn’t remember how much it was. Berkowitz strained to use this to undermine the credibility of the witness but ended up making the governments case look bad. In all the digging and charges there has been no direct evidence against Skilling and the best example they have of wrong doing is a tiny photo shop? It must have been extremely anti-climatic for the jury, but for Berkowitz’s show trial they have to use what they can.

Several news sources made a big deal out of the fact Skilling lost his temper on the stand, but it didn’t come off that way to us. Berkowitz reached for evidence and tried to insinuate that preliminary accounting estimates that were later updated in the actual published financial results were evidence of fraud. Of course thats an absurd idea and Skilling, never one to suffer fools gladly, let him know it. From the exchange it seemed pretty clear that Berkowitz either didn’t understand what was going on or was deliberately making something commonplace seem like fraud.

Berkowitz finished off by throwing in some non sequiturs, asked some questions that didn’t go anywhere and really not doing much of anything. It’s impossible to know what the jury thought of all of it but the Tradesports contracts have no moved a tick since the cross started. All of this bodes very well for Kenneth Lay. If that best Berkowitz can do then Lay is nearly home free.