Canales Setting Them Up And Knocking Them Down

At EBS, Bill Collins wrote an almost incoherent email in which he said that BOS was a “bitch on the sofa”. I think the poor guy was thinking of “the lipstick on the pig” concept but got confused. For some reason the government loved that email. Strangely, the email did not go to any engineers who could actually have set Collins straight. Scott Yeager, however, was a recipient.

Yeager’s attorney, Tony Canales, always referred to the email as “the pig on the sofa” email instead of “bitch on the sofa”. For some strange reason, this irritated prosecutor Ben “Opie” Campbell terribly, so of course, Canales being Canales, he kept doing it. At one point, Campbell stood up and declared, “Your Honor, there are no pigs in this case!” Everyone at the defense table started laughing.

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Prosecutor Says Ellison's Fortune "Built On Lies", Seeks Restraint Of Assets

In a pretrial conference this morning, Department of Justice prosecutors argued that Cara Ellison’s entire net worth, estimated to be between $12 and $16 billion, is entirely the result of fraud at Cara Ellison Corp. and the government would like to restrain all assets. Ms. Ellison is accused of 753 counts of fraud, money laundering, conspiracy, inisder trading, perjury, blackmail, bribery and tax evasion. To demonstrate that many of Ms. Ellison’s assets were bought with laundered funds, Judge Carly Cantwell allowed brief testimony from forensic accountant Eugene Bucknell. The methodology to determine laundered funds was “first in, last out,” Bucknell stated, meaning the first money in an account was presumed to be clean while any sequential funds were considered dirty.

Attorney Hugh Langston, one of Ellison’s lead attorneys on the case, vociferously denounced the methodology as “arbitrary.” “There ain’t no accountant in the world who will stand by such shoddy, sloppy, downright criminal work,” Langston said.

After a long morning of arguing among the attorneys, it was determined that for the purposes of restraint, not forfeiture, Mr. Bucknell’s methodology was adequate. Using Bucknell’s methodology, the government showed that Cara Ellison bought numerous cars, boats, properties, and jewelry with tainted funds. The judge ruled that all of Ellison’s international assets, including a home in South Africa and several boats and aircraft in Portofino, Italy, would be restrained.

The judge restrained several brokerage accounts and two of Ellison’s race cars. “Your client will have living expenses and attorneys fees available,” Cantwell said at the end of the hearing.

“Thank goodness for that,” Langston said, “I was afraid she’d have to hire a cheap Mexican attorney.”

Yoga Pants + Boulder Shoes

I’m not proud.

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Why Was The Government Afraid Of Its Own Indictment?

Should a jury always have an opportunity to read the indictment for the defendant whose fate they are deliberating?  I believe the defendant should always be given the right to decide if the indictment is given to the jury or not.  The reason is that the indictment is a government spin document — literally nothing in the indictment should be accepted as fact, not even background data.  Lots of judges, including Gilmore, routinely do not give the indictment to the jury because defense attorneys routinely object.
 
That’s what makes the EBS situation so fascinating.  Here the defense attorneys moved to place the entire indictment, the core spin document written by the government, into the hands of the jury.  The defense wanted it in the jurors’ hands because it is an inane document and because the government failed to even address the bulk of their accusations.  In other words, the government did not follow the record of their indictment during the trial. 
 
The government, who wrote the document, objected to the jury seeing it.  Gilmore said she would not give the document to the jury because it had bad things about the defendants in it.   What a farce!  The government panicking over its own indictment! 

Crunchy Girl

I have lived in Boulder, Colorado for fifteen days. I’ve lost fifteen pounds. I wasn’t aware that I was on any kind of diet; lord knows my Twizzler habit hasn’t lightened up a bit. But the fact that I’ve lost weight without trying isn’t the only weird thing going on. I hate to admit this but I’m starting to talk like a Boulderite. I caught myself saying today, “The building manifests itself with the energy around it.”

I know. I wanted to kill me too. It was awful.

But the weight loss, at least, has a realistic explanation. I’m hiking and trail running every day, sometimes two or three or even four (!) times a day. I’m becoming acclimated to the thin air so I’m able to run faster, and thus burn more calories. And since I am in Boulder, I eat like a Boulderite: fresh veggies, fruits… and I sneak my Twizzlers like any self-respecting Texan.

Back in the day, I used to be a great cyclist. I’ve won races before – tough races like the MS150 and the Bluebonnet Metric Century. I remember from those days, the constant vigilance over my body. Babying my legs, complaining loudly about the agony of my muscles, the whole macho culture of it. Well, that is all they do here in Boulder. Every conversation starts and ends with the injuries you’re nursing, what you’re doing to fix it, and how terribly painful it is. Injury itself is a sport in Boulder. I have problems with my calves. It’s not glamorous like knee problems, but you know, that’s all I have to offer.

I’ve gotten back into yoga. This is why I think I started talking like a hippie.

Most alarming, I’ve begun to be in bed by ten and up by eight. Boulder is an early to bed kind of town, they roll up the sidewalks at a quarter to eight. This is because everyone is so health focused that on weekends, there are races that start early, and if you’re not racing you have to get to the rocks by nine or you can just forget it – you’ll never get a chance to climb.

Boulder is also the friendliest place I’ve ever lived. I’ve already made several good friends. They come over and sit on the back deck or the front porch and we drink wine. But even strangers like to chat. People will just come up to me and ask my name, ask what is my story, etc. I was very put off the first few times but now I’m used to it.

Also, I’ve started to skateboard. That needs its own post.

Clean living, my boyfriend’s grandmother would call it. Good food, good air, a nice solid routine of hard work. I’m living the way I always sort of intended to but was just so hard in Los Angeles, Houston, DC, and New York. This place is not heaven; it has no skyscrapers, even the cowboys are hippies (that deserves its own post too), there is no cinema, no art scene, no Enron echo.

And yet I find that I bound out of bed every morning, excited about my trail run, followed by an hour of yoga, followed by five hours of writing, followed by a homemade dinner, followed by friends stopping by to chat and have some wine.

There are worse lives. I’m scared to like it. I don’t want to be a hippie! But I will settle for being a crunchy girl.

Road Pristine

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The Brilliant Wisdom of Tony Canales

As I pointed out in a previous post Scott Yeager’s attorney, Tony Canales, is an astonishingly good, brilliant attorney. He will use whatever tools he has at his disposal to get his point across. Often it is humor; some of his lines are laugh out loud funny. But he is also not afraid to be loud, obnoxious, forceful, in-your-face, relentless, and definitely Alpha. In other words, he is my ideal man.

It was Tony Canales who flushed out the truth about the Shelby 2 video – that it was NOT played during the 2000 Analyst Conference. And man oh man, was it fun to watch. He was unstoppable. Even Judge Gilmore tried to tangle with him and he put her in her place. The lesson is clear: you do not trifle with Tony Canales. Ever. You will lose.

On April 19, 2005, Tony Canales began his crossexamination of Ken Rice. The day started out with a jocular enough tone:

Mr. Canales: Your Honor, the court reporter has instructed me to slow down once in a while. So, if I look at her, she’s going to give me a frown, I’m going to slow down.

The Court: Don’t give her the evil eye, now.

Mr. Canales: Only if absolutely necessary.

A little friendly back and forth with the judge is never a bad thing. So Canales starts in with Rice. He’s very polite,
everything is ordinary. He gets Ken to talk about how he was out of the office a few days before the Analyst Conference due to a cold. It’s always the innocuous stuff with Tony Canales. He never starts crap over nuclear issues, he goes for the small stuff, and then completely screws up your day, like this:

Q Would you agree with me then, sir — let’s look at the big map — at the big calendar — that if you missed the 9th, 10th, 11th, you’re saying in the e-mail on the 13th that you were rejoining from the world — you know, coming back to the world of the living, you were out at least since the 9th to the 13th?

A That’s probably true.

Q Now, you — did you intend, sir, to leave the impression with this jury that, at some point in time before the
Analysts’ Conference, you met with Scott Yeager to conspire and plan and confederate and every other adjective for the Analysts’ Conference? Is that the impression you’re trying to leave with this jury?

MR. CAMPBELL: Objection to form, Your Honor.

THE COURT: Objection sustained.

Q Sir, did you meet with Scott Yeager on the 9th?

A No.

Q On the 10th?

A No.

Q On the 11th?

A No.

Q On the 12th?

A No.

Q On the 13th?

A I don’t think so.

Q You don’t think so?

A I don’t remember everything I did on the 13th.

Q But you have talked — have you not, sir, testified for three days before this jury date, time, location to
Mr. Campbell’s questions because you knew exactly what you were — where you were and who you met with? Did you not do that earlier?

MR. CAMPBELL: Objection.

THE COURT: Objection sustained. First of all, that isn’t even true, Mr. Canales, so come on now.

MR. CANALES: Sure it’s true, Judge. He testified to —

THE COURT: Objection is sustained. I said stop it. It’s not true. Ask another question.

MR. CANALES: I believe it’s true, Judge.

THE COURT: You know what, leave, because this lawyer, obviously, needs some talking to.

THE COURT SECURITY OFFICER: All rise.

THE COURT: Go on out, please.

(The jury begins to leave the courtroom.)

THE COURT: I am not going to argue with you in this courtroom, Mr. Canales. If I make an objection — if an
objection is made and I sustain it, that means stop talking.

MR. CANALES: And I will. And I will but you cannot tell that what I said wasn’t true. You’re attacking me,
Judge. You said —

THE COURT: First of all, it’s not true because you can’t just sit up here and say this is what you did all during the trial. That’s not true. Now, you —

MR. CANALES: Yes, it is.

THE COURT: Stop it. Just cut it out. That is not going to be happening in here. I’m not going to argue with
you. If I make a ruling, that is it. I’m not arguing with lawyers.

MR. CANALES: And I accept the Court’s ruling. I do not accept the Court telling me that I did something that was
not true. That, I do not accept.

THE COURT: I said that what you said about this witness’s testimony was incorrect, and that is not true.

MR. CANALES: Well, that’s the way I took it, Your Honor.

THE COURT: Well, if the objection is sustained, that means that’s it.

MR. CANALES: And I accept it. But I do not accept the Court saying that I said something that wasn’t true. That’s why I objected.

THE COURT: You know what, that’s just too bad for you. Go to lunch and see if you can get your attitude together over the lunch break.

MR. CANALES: I — yes, ma’am.

THE COURT: Get out of here. Go. Get out of my courtroom. We’re at lunch. You-all be back at —

MR. CANALES: What time do you want me back?

THE COURT: — 1:35 this afternoon.

Something else happened in this transaction that you probably didn’t notice. In the official record, in a pre-trial conference, one of the attorneys (I believe it was Zimmerman but I may be mistaken) made the grave error of calling Judge Gilmore “ma’am.”

“Don’t ma’am me,” Judge Gilmore snapped. “I hate that. I won’t have it in my court room.”

Nobody called her “ma’am” again until this point when Tony Canales sneaked in a brilliant passive-aggressive “ma’am”. But it gets even better.

During lunch, the attorneys huddled over the fact that Gilmore had admonished Canales in front of the jury, just as they were getting up to leave. So naturally, they had something to say about it after the recess. Gilmore doesn’t sound very judge-like here. I love this exchange with all the attorneys being so polite and she’s just losing her mind.

[Mr. Sepenuk represents Joe Hirko]

MR. SEPENUK: Good afternoon, Your Honor. Your Honor, on behalf of Mr. Hirko, as the old guy member of the team, I would respectfully move, Your Honor, for a severance of the case regarding Mr. Hirko.
My reason for asking that, Your Honor, is this. Mr. Rice is the pivotal, crucial witness against
Mr. Hirko. When Your Honor engaged in the colloquy with Mr. Canales —

THE COURT: You mean when he was screaming at me?

MR. SEPENUK: Well, I believe that’s the one, Your Honor. And when you admonished Mr. Canales and actually told Mr. Canales that he had improperly characterized Mr. Rice’s testimony, I think Your Honor’s words were, “You’re not telling the truth, Mr. Canales.” You did that, Your Honor, I respectfully note, in the presence of the jury. You did it not once. You did it twice. You had asked the jury, I think very properly, to file out, but while the jury was just beginning to file out, Your Honor, you made the comment again to Mr. Canales that Mr. Canales was not telling the truth. That, Your Honor, I believe —

THE COURT: I did not say — use those words.

MR. SEPENUK: Well, that’s my recollection, Your Honor. And I apologize to Your Honor if I have improperly characterized it.

THE COURT: That’s not what I said. You know that’s not what I said.

MR. SEPENUK: Well, that — Honestly, Your Honor, that’s the way I heard it. I think what’s happened is that you have —

THE COURT: Okay.

MR. SEPENUK: — I’m sure inadvertently, bolstered Mr. Rice’s credibility.

THE COURT: No. I haven’t bolstered anybody’s credibility. The issue had to do with the objection of whether or not Mr. Canales was improperly characterizing earlier statements that “every single time, every single date, that he asked you about” — “every time, every date, every place, you got exactly right.” Well, that just wasn’t correct.
The objection was sustained because the witness forgot some stuff before, remembered some things, remembered some things accurately, remembered some things inaccurately. It just wasn’t correct that every single time he got the exact date, time and place correct on every single question. It just wasn’t true, which is exactly what the question was. In any event, let me cut it short for you. Your request for a mistrial is denied.

MR. SEPENUK: Your Honor, just one more moment. Needless to say, I know you’ll squash me like a bug if I argue with you, and I don’t intend to do that, truly.

THE COURT: Are you still on the motion for mistrial that I’ve already ruled on?

MR. SEPENUK: Actually, the motion was for a severance. If you deny the motion for severance, Your Honor, then we would ask for a mistrial —
THE COURT: Okay.

MR. SEPENUK: — based on what I’ve previously stated.

THE COURT: No severance. No mistrial.

MR. SEPENUK: And then, finally, Your Honor, very, very respectfully, we would ask the Court to let the jury
know that it’s the duty of counsel to present evidence on behalf of their client, have colloquies with the Court on disputed issues —

THE COURT: It’s not the duty of counsel to scream and holler at the Court. I’m not putting up with that.

MR. SEPENUK: Your Honor, could you at least tell —

THE COURT: In this day and age, with what’s been going on with judges recently, judges do not have to put up with lawyers that are openly hostile to them. That’s why we’re not having any podium in here from now on. Y’all can
question from your seats. I don’t want any lawyers that are that openly hostile that close to me, the witness or my jury.

[NOTE: She enforced this new question-from-your-seats rule for about a day before she gave up trying to enforce it. It was silly. How do you pass exhibits to the witness from your seat? Even Gilmore eventually saw the stupidity of that ruling. ]

MR. SEPENUK: May I make one final, respectful request that you tell the jury that nothing you said to Mr. Canales or, indeed, to any lawyer in the case is meant to reflect your opinion of any issue in the case or your opinion with respect to the credibility of any witness?

THE COURT: I’ll do that at the end of the case.

MR. SEPENUK: Thank you, Your Honor.

MR. TOMKO: We join that motion, Your Honor, for Mr. Shelby.

THE COURT: No need to stand up just to say “Amen”.

MR. LAVINE: Your Honor, on behalf of Mr. Howard, we join the motion for mistrial, but we’d like to put on the record that there is a different basis, that the prejudice from the exchange between the Court and Mr. Yeager’s counsel would flow to Mr. Howard, and we’d move for mistrial on that basis.

THE COURT: Okay. So, that means that anytime a lawyers decides that they — things aren’t going too well for them they just start standing up and screaming and hollering at the Court and then everybody stands up and says, “Oh, my God. We need a severance because somebody has been screaming and hollering at the Judge and that’s going to reflect poorly on all of us”? That’s a good tactic. Your request is denied.

MR. LAVINE: We move for a severance, in the alternative, based on that.

THE COURT: Denied.

MR. LAVINE: Same basis, Your Honor. In addition to the request for jury instructions that Mr. Hirko’s counsel has asked for, we would ask that the Court instruct the jury that they are the exclusive finder of fact as to what the witness —

THE COURT: I’ll tell you what. Why don’t you guys submit what you want for the jury instructions at the appropriate time, and I will definitely look at every single thing that you give me.

MR. LAVINE: We would ask that those instructions be given to the jury now, Your Honor.

THE COURT: I’m going to do it at the end of the case.

MR. CAMPBELL: Can I ask one question, Your Honor? It’s merely procedural. Would you like us to object from — sitting down or do you want us to stand up for objections?

THE COURT: You need to stand up for objections. Otherwise, I won’t even know who it is.

MR. CAMPBELL: That’s — I thought it would be easier to hear if we stand up.

THE COURT: But everybody can question from their seats. This is not a day and age where courts have to put up with hostility from people in the courtroom and where anybody should have to, and I’m not going to. Go get the jury.

Campbell is such a toadie. In any case, Canales wasn’t through. Oh heavens no. His next “fuck you” to the judge came that same afternoon. There has been a lot of quiet talk about Gilmore’s racial prejudices, her general dislike for “rich white guys” and I think Tony Canales was picking up on that, and giving it back to the judge, not necessarily Ken Rice, when the following exchange took place:

Q. Did you confer with anybody – anybody – as to whether or not at that 2000 Analyst Conference Shelby 2 was played?

A. I talked to my lawyer, Mr. Dolan, and he doesn’t — he told me he doesn’t know more than I do.

Q. He was no help to you?

A. All that money. No.

Q. Maybe a cheap Mexican lawyer could help you out.

A. I didn’t hear you.

Mr. Canales: Forgive me, Your Honor, for that.

Well, we must give credit to Ken Rice – that was a cute comment. But wow, Canales hits hard when he wants to.

He then argues with the judge about giving the Prosecution time to view the tape that they had given the defense. It made no sense then, just as it makes no sense now. But Canales eventually prevails and shows the tape of the Analyst Conference which shows that only one Shelby tape was played.

If Gilmore bolstered Ken Rice’s credibility with her comments that Canales was lying, Canales certainly reversed that with his proof that Ken Rice was at least mistaken.

Scott Yeager and Seinfeld

I’ve previously compared various elements of Enron to Seinfeld. While writing my update on Scott Yeager, another Seinfeldian element occurred to me. The government accused Yeager of “criminal omissions”. That sounds an awful lot like the crime of “criminal indifference”, which was the crime committed by Jerry, George, Kramer and Elaine during the final episode when they refuse to come to the aid of a fat guy being mugged.

As lawyer Jackie Childs says when he hears about the case, “This is America. You don’t have to help no-one.”

Seinfeld writers certainly understood the absurdity of being accused of a crime based on your refusal to commit an overt act. Theft, rape, murder, espionage, insider trading all require the defendant to DO something. Even a case of child neglect seems that the accused would be doing something other than what he/ she should do. For example, instead of feeding your kids, blowing the money on hookers and blow.

But Scott Yeager did nothing. He didn’t even do anything INSTEAD OF SOMETHING ELSE. In perfect Seinfeldian style, he sat down and watched an analyst conference, thereby comitting criminal indifference. Supposedly he should have jumped in front of Jeff Skilling like the Secret Service taking a bullet for the president, screaming “No! It’s all lies!”

But Skilling wasn’t lying. Yeager had no knowledge of any insider information, and thus had no reason to stop any comments uttered at the Conference. And even if he did (and let me be clear: he didn’t) who does that? Can you imagine if he actually stood up and interrupted the speaker? It would be funnier if it were during Rice and Hirko’s comments, I think. Jeff Skilling would have made a joke and diffused the situation. Rice and Hirko would have no fucking idea what to do. I can imagine Yeager standing up, saying in a loud, clear voice, “This is bullshit!”

The room goes completely silent. Analysts aren’t sure what to think. Rice forces himself to stay cool. He puts one hand in his pants pocket. Hirko looks to Rice, then back to Scott. “Scott?” Hirko says, an uncertain smile playing at his mouth. “Did you have something to say?”

“This is bullshit,” Scott says. He is clearly on the verge of a meltdown. He would have to be in order to behave in such an irresponsible way. His career is over. The stock price would be dropping even as he staggered up to the podium, shoving Joe aside for the microphone.

“I’m sorry but I can’t sit here and be criminally indifferent,” Yeager would say. He would rip off his jacket. Sweat would be pouring down his face. Pit stains would show through his blazing white shirt. Maybe he would have been drinking. The smell of alcohol would waft from him, but that alone wouldn’t explain his unfocused eyes or the strange manic energy charging the air around him.

Ken Rice would have moved to the side of the room where Skilling was standing in shocked horror. Rice would pull his phone out of his pants pocket and discreetly dial 911.

Joe Hirko, the peacemaker, would put his hand on Yeager’s shoulder. Speaking away from the microphone, he would ask, “Scott, buddy, are you okay? Why don’t you sit down? Do you need a glass of water?”

Yeager jerks his shoulder back, accidentally striking Joe in the face. Only then does Joe realize Yeager is beyond reason. “This is all lies,” Yeager says. He’s breathing heavily. He starts unbuttoning his shirt. “All lies. The Broadband Operating System… Lies!” From the back of the room Rex Shelby stands up. He walks toward the podium. Scott sees him and shouts, “Stop!”

Shelby stands still. Skilling signals for him to stay where he is.

“You!” Yeager shouts at Hirko. “You approved press releases last year that didn’t specify the timeline of the BOS development! And you,” he says to Rex Shelby as spit flies from his mouth, “you are planning to sell stock tomorrow on insider information with your friend from Modulus who will also sell the exact same number of shares at the same time but not be indicted. I can’t bear these horrible lies!”

He rips off his shirt and looks at Hirko. Hirko says calmly, “Scott, sit down.”

Suddenly the shirtless executive bursts into tears. He hugs Joe, clinging to him. Hirko, having no idea what to do, awkwardly pats his back in a fatherly gesture. Suddenly, Scott screams, “Damn EBS!” He backs away from Joe, wiping fiercely at his teary face, and collapses partially onto the podium, holding his face in his hands and weeping.

Then he looks out at the analysts and through his tears, sobs, “I am a lot of things. But I am NOT criminally indifferent!”

That would be so hilariously ridiculous. Yet that is the only way I can imagine Scott Yeager or indeed any executive standing up to interrupting an analyst conference. They would have to be out of their mind. Certifiably crazy.

But let’s put the onus on the government. Does the gov have any documented cases of somebody actually doing that? Doubt it. They don’t have any cases of “criminal omissions” either because it is not against the law to do nothing.

Oh and I seem to recall a certain “right to remain silent”. Granted, an analyst conference isn’t an arrest, but if you don’t have to talk to police to keep from incriminating yourself, it stands to reason you can also decline to say anything to some analysts who are barely listening to you anyway.

Criminal omissions?! This is just nonsense. It is getting increasingly difficult to take the Enron Task Force clowns seriously. At least in the Seinfeld episode, Jerry, Elaine, Kramer and George only got a year in prison. Yeager could go away for fifty.

Team Yeager all the way!

Sign Fail

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Oh Deer!

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