Enron trial opens in Houston

The fraud trials of Enron chief executives Kenneth Lay and Jeffrey Skilling began yesterday in Houston.

Lay and Skilling face several charges of conspiracy, deception, fraud and insider trading. Both have pleaded not guilty, arguing that their reports of Enron's profitability in the late 1990s were accurate.

But the two executives are likely to face testimony from several former colleagues who accepted plea bargains in previous criminal cases. Former chief financial officer Andrew Fastow was indicted in 2002 for fraud, money laundering and conspiracy, and eventually pleaded guilty to fraud in 2004, receiving a 10-year sentence. Fastow admitted manipulating Enron's accounts by moving poorly performing assets into various off-balance-sheet companies.

"As a result, Enron overstated its earnings. I and other members of Enron's senior management knew the impact of the [off-balance-sheet companies] on Enron's financial statements," Fastow admitted at the time of his plea bargain.

And in late 2005, former chief accounting officer Richard Causey confessed: "I conspired with members of Enron's senior management to make false and misleading statements."

Lay and Skilling's trial proper will begin with opening statements today, followed by prosecution witnesses on Wednesday. The trial is expected to last at least four months.