Smarter Than the Smartest Guys in the Room?

A conversation with Enron prosecutor Sean Berkowitz

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For the past two-plus years, Sean Berkowitz, a 39-year-old native of Northbrook, has worked on the Justice Department’s Enron Task Force, pursuing the executives responsible for the corporate scandal that shook the nation. The task force has brought charges against 34 former Enron managers-racking up 16 guilty pleas and eight

Berkowitz at home on his rooftop in West Town

convictions so far. But in May, with Berkowitz as the lead prosecutor, the task force won its most important victory when a federal jury brought in guilty verdicts on fraud , conspiracy, and other charges against Enron’s former chairman Kenneth Lay and CEO Jeffrey Skilling, once widely hailed as “the smartest guys in the room.”

Berkowitz, a marathon runner who is divorced and currently single, graduated first in his class at Tulane University before attending Harvard Law School. He joined the Enron Task Force in December 2003, on the recommendation of his boss, Patrick J. Fitzgerald, the U.S. attorney in Chicago, and became the task force director last July.

Chicago caught up with Berkowitz just before he left for a well-deserved vacation in Vancouver. Although he is guarded about courtroom secrets, given that the defendants are expected to appeal, Berkowitz talks about the case and the verdict, and about having his mother watch him in the biggest trial of his career.

Q. How did you initially get involved with the Enron Task Force?
A.
The call had gone out for talenmted prosThe call had gone out for talented prosecutors, and I was fortunate enough to have Pat Fitzgerald think of me. I was at a time in my life when I was ready to try something new.

Q. You’re a prosecutor with a reputation for winning cases. Did you ever consider the risks of losing the biggest trial of your career?
A. Not when I joined on, no-maybe foolishly so. Nobody had even been charged when I was brought on. So it was, I think, a case of looking at the facts and hopefully, if we decided to charge, which we did, it would be a case that we could win. As a prosecutor, you can’t be afraid to try the tough cases, or you’re not doing your job.

Q. How did you feel when the judge read off the guilty verdicts against Lay and Skilling?
A.
There was a sense of relief, more than anything else. We had put on, I thought, a very strong case. It was a case that was being watched, with a lot of ramifications, by both the outside world and the victims of the case, and I had spent the last two and a half years of my life working on it. And, frankly, there was a sense of relief and exhaustion, more than anything else.  There was a sense of relief, more than anything else. We had put on, I thought, a very strong case. It was a case that was being watched, with a lot of ramifications, by both the outside world and the victims of the case, and I had spent the last two and a half years of my life working on it. And, frankly, there was a sense of relief and exhaustion, more than anything else.

Q. How confident were you about the outcome of the case, which close observers say never seemed clear-cut?
A. I never let myself get confident or not confident about it. I really tried not to think about what the jury was going to do. It would’ve driven me crazy on a day-by-day basis to wonder, were we winning? Were we losing? And so I really just concentrated on whether we were doing a good job. And I felt that we were.

Q. Talk about the prosecution’s strategy.
A. The strategy was certainly to use the cooperating witnesses [Enron’s former treasurer, Ben F. Glisan Jr., and CFO Andrew Fastow, among others] to bring the jury inside of what was going on at Enron, and to use the documents that existed to corroborate their testimony and to do it in a way that was simple and understandable to a jury of laypeople. I don’t know if that’s a remarkable strategy or some sort of brainstorm, but what I thought was particularly effective was, in this case, we were actually able to execute on that strategy, using a number of different witnesses, who were among the highest-ranking people at Enron.

Q. Legal experts have said your cross-examination would be one of the most critical parts of the trial. How did you prepare for it?
A. I cross-examined Jeff Skilling, and one of my trial partners [John C. Hueston, of the U.S. attorney’s office in Los Angeles] cross-examined Ken Lay. With respect to Jeff Skilling, he was commonly thought of as ‘the smartest guy at Enron,’ and so cross-examining him was a tremendous challenge. I had to go toe to toe with him on the ins and outs of an extraordinarily complicated business and one that I could never hope to know as well as he did. But I had my themes, I had documents, and I had details. And I was able to ask him very hard questions, and, on occasion, catch him by surprise. Ultimately, he was extraordinarily knowledgeable about a lot of details and there were certain things which he, for whatever reason, had a lack of recollection about . . . I think that the jury found that significant-that somebody who was this bright, when asked hard questions, there were certain topics that he didn’t have a recollection of. The preparation that went into it was months in the making. I felt as prepared as I could have been for it, and I think we executed very, very well. But I do think the credibility of the defendants was very important. When defendants take the stand, a lot of times it comes down to whether the jury believes the defendants, or not. I don’t know what the jury thought or didn’t think; I’d like to hope that my cross-examination caused them to doubt his credibility.

Q. How did you catch Skilling by surprise?
A. There was an investment he had made in a startup company that did business with Enron-Photofete [an Internet photo company that was run by Skilling’s former girlfriend]. That was an area that he did not appear to be well prepared for. He had failed to disclose the investment, even though it violated Enron’s ethics policies. He was evasive and couldn’t recall key issues. It affected his credibility. He also had a lack of recollection about a trade that he had made. He sold 500,000 shares of Enron stock in September 2001, a month after he left the company. And when he was deposed, he said [the terrorist attacks on] September 11th [were] why he actually sold the shares. We were able to confront him with evidence that, the week before September 11th, he had tried to sell 200,000 shares, but it didn’t go through-which is obviously inconsistent.

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