Banker Testifies on Behalf of Krautz in Enron Trial

Enron defendant Michael Krautz asked a banker friend to refinance Krautz' house to pay legal fees and has since been working for the man who testified today to Krautz' good character.
In this slow-moving case jurors heard a tale of two very different defendants today.
In his fifth day on the stand, ex-Enron Broadband Services CEO Joe Hirko was finally asked his last question today.
Evidence showed that after Hirko was fired from Enron in 2000, he had enough money from Enron and his former job at Portland Gas & Electric that he spent the next year unemployed, golfing and doing what he wished.
In contrast is his codefendant Krautz, a former EBS senior accounting director, who was fired from Enron in March 2003 when he was charged in this case. Shortly after he left Enron, Krautz was working a minimum wage job at a dry cleaners when he went to refinance his house to take cash out to pay his lawyer.
Wayne Lapham, an 8-year friend of Krautz', hired the CPA on the spot two years ago and told jurors in U.S. District Judge Vanessa Gilmore's court today that he finds Krautz to be an honest and forthright person.
Krautz, Hirko and the other defendants are all presenting such character witnesses to testify to their good reputations and their honesty and integrity.
Krautz and Kevin Howard, former EBS chief financial officer, are charged with perpetrating an accounting fraud to generate $111 million in false earnings for Enron through a failed online movie service.
The two are charged in the same conspiracy with Hirko, Rex Shelby and Scott Yeager.
But Hirko, Shelby and Yeager are accused of misrepresenting EBS's technology in press releases and to stock analysts to boost the stock price and cash in by selling their own stock.
All but about one week of this 11-week trial has been about whether EBS' network technology was overstated.
It seemed jurors breathed a sigh of relief today when a switch of attention to Krautz signified the case may be within a week to 10 days of finally going to deliberations.
Most of Hirko's testimony today was along the same lines as previous days of cross examination. He interpreted EBS emails and documents to fit with his view that Enron's network control layer existed in 1999 and 2000 when prosecutors say the executives lied about the network.
In analyzing what executives said existed and what was presented publicly as plans for the future, discussion of the present and future tense of verbs has been a part of this case.
Hirko was questioned today about a brief early 1999 EBS presentation he made to stock analysts in which his slide used past tense verbs describing what the network had done. But he said his oral presentation at the time made it clear the verbs were referring to plans for the network that were not yet realized.
Hirko's lawyers have not yet rested and could put on some more technology testimony. But the bulk of what's left of the defense case will focus on the accounting for the video on demand deal.
Prosecutors are expected to put on some rebuttal testimony before the case will be argued to the jury.