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CNN BREAKING NEWS

Skilling and Lay Guilty; Train Service on Northeast Corridor Should Resume Soon; Jeb Bush Buzz

Aired May 25, 2006 - 10:59   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


DARYN KAGAN, CNN ANCHOR: Lots to get to this hour. And thank you for joining us in the second hour of CNN LIVE TODAY. I'm Daryn Kagan.
We are looking at a number of pictures at once. Thad Allen is being sworn in as the new commandant of the U.S. Coast Guard.

And of course it's the day after a new "American Idol" captured the 2006 title.

We're going to have all of that and more right here on CNN LIVE TODAY.

CNN is the most trusted name in news.

The power was out, the trains at a standstill. They are moving now, but tens of thousands of travelers and commuters are running late.

CNN's Allan Chernoff has the latest. He is in New York City at Penn Station.

Allan, hello.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Daryn, let me correct it a little bit. Some of the trains are beginning to move. The train from New York to Boston has just left the station, but I can promise you the vast majority of passengers in Penn Station right behind me, they are still standing in the main waiting room, waiting to look at that board and see that their trains are actually operating and running on time.

What's happening right now is that power is gradually being restored. Amtrak is checking the substations going all the way from Philadelphia, up to New York, checking to make sure that everything is back on line. And in about 15 minutes' time, Amtrak says they believe they'll have full power restored, and at that point they're hoping to gradually get all the trains moving once again. And that's going to take some time.

One example, the train from New York up to Niagara Falls, on the schedule board it says that it's on time for 10:45. Obviously, it's already more than 15 minutes late.

This delay here that we had since about 8:00 this morning, when the power went down all the way from Washington up to New York, has certainly inconvenienced thousands and thousands of commuters and travelers. Some people much more than others.

One example, a woman suffering from cancer on a train from Miami is still stuck on the train. There is an emergency medical technician that I spoke with a few moments ago in Penn Station. He has a stretcher, and he's waiting for the woman to arrive. He'll then transport her back to her home in Long Island, but just imagine, that train now delayed three and a half hours. And the woman, he told me, cannot move very well at all on the train.

So terrible discomfort for some people.

We also should mention that there have been four trains stopped in tunnels between Manhattan and New Jersey. What Amtrak did was they used diesel trains to push and pull those trains out of the tunnels and get people at least back into the station over here -- Daryn.

KAGAN: Allan, thank you.

Allan Chernoff with the latest on the train stoppage situation in the Northeast.

As we move down south a little bit to Washington, D.C., the constitutional clash between Congress and the Bush administration, there are new developments to tell you about this morning. A Capitol Hill odd couple. You have Dennis Hastert, Republican, and Nancy Pelosi, Democrat, not happy about a weekend FBI raid on the office of Louisiana Democrat William Jefferson.

Here now, just a few minutes ago, the House minority leader, Pelosi, commenting on that search.

(BEGIN VIDEO CLIP)

QUESTION: Would you ask for his resignation from Congress? And if you do, why not have asked for a Ney or DeLay or anybody else?

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Well, I didn't. I haven't, and I said repeatedly that Mr. Jefferson's service in Congress is a matter between him and his constituents. It's up to the people of New Orleans to decide who their representative is in Congress. And I respect that. I have, though, asked for him to resign immediately from the Ways and Means Committee.

QUESTION: He said no.

QUESTION: How do you respond to the fact that he has not resigned?

PELOSI: That's all I'm going to say on that subject. I've asked him to resign. I think he should.

QUESTION: Madame Leader...

PELOSI: Yes?

QUESTION: ... Mr. Jefferson said that it was discriminatory to ask him to leave.

PELOSI: Well, I don't agree. I don't agree. I don't agree.

And again, as I've said, my letter speaks for itself. I've asked him to resign immediately in order to uphold a high ethical standard that we have in our House Democratic caucus.

(END VIDEO CLIP)

KAGAN: And there you have it, the House minority leader, Nancy Pelosi, asking Representative William Jefferson to resign his seat on the House Ways and Means Committee, but William Jefferson claiming he's innocent, and he says he is not going anywhere.

More on that.

Then there's this story from Capitol Hill. The speaker of the House, ABC News, saying take it back. The network reported last night that Dennis Hastert is under investigation, part of a Jack Abramoff lobbying corruption probe. But Hastert says it's not true and he is demanding a full retraction.

Now here is the clencher -- or it would seem to be. In a highly unusual move, the Justice Department went on the record saying Hastert is not under investigation. So is that the end of the story? Well, not according to ABC.

The network says the denial only means that Hastert is not a formal target of the investigation. And ABC says it stands by its report.

Will the vice president testify against his former chief of staff? Court filings by the prosecutor in the Lewis "Scooter" Libby case indicates that Mr. Cheney could be called to the stand. Specifically, Cheney would be asked about handwritten notes he made on a "New York Times" op-ed piece critical of the administration's Iraq policy. Libby resigned as Cheney's chef of staff last October after he was indicted on perjury charges. He has pleaded not guilty.

To Florida now. He runs a big state, but can he play in the big leagues? There has been talk that Jeb Bush could become the next NFL commissioner. The buzz doesn't stop there.

CNN's Brian Todd has the story that you first saw on "THE SITUATION ROOM".

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): He's got approval ratings his brother can now only dream about. He plans to leave office in January, and is searching for, as they say, his next challenge.

GOV. JEB BUSH (R), FLORIDA: A day doesn't go by where someone doesn't have a great idea for what my life looks like for 2007 and beyond. TODD: So why not take the helm of America's most popular sport? Jeb Bush admits he was recently approached about the NFL commissioner's job, being vacated by Paul Tagliabue. A tempting role for a man who one invested in the Jacksonville Jaguars and makes a virtual appearance as a Miami Dolphin receiver, going against his brother, suited up as a Dallas Cowboy, in the popular Madden NFL '06 video game.

But Jeb Bush isn't taking the bait.

BUSH: I'm not going to consider any other options other than being governor until I finish.

TODD: An NFL official tells CNN the league won't comment on candidates, but hopes to have a new commissioner by mid-August. Leaving early, analysts say, would present a host of problems for the Florida governor.

JENNIFER DUFFY, COOK POLITICAL REPORT: They're heading into a couple of things. Hurricane season, the election season, which you know, he will preside over in one way or another.

TODD: If not the NFL, what is next? Bush has turned down repeated overtures to run for U.S. Senate, replacing his former secretary of state, Katherine Harris, on this year's ballot. He's also repeatedly refused a presidential run in 2008.

GARY FINEOUT, "MIAMI HERALD": I think it's clear right now, there would be Bush fatigue. But now, the thing about Jeb Bush is Jeb Bush is from the conservative wing of the party. And there are a lot of people who are conservative Republicans who like him very much.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

KAGAN: More from the best political team on television every weekday in "THE SITUATION ROOM" at 4:00 p.m. Eastern, again in prime time at 7:00 Eastern.

Want to show you live pictures. This is Elizabeth, New Jersey. A moving train. You would think on any given day, big deal, but it is a big deal because there has been a huge power outage earlier this morning stranding thousands of passengers up -- and commuters up and down the Northeast Corridor from New York to Washington, D.C. And a little while ago, Amtrak said that power would be restored very soon. It looks like at least one train is back on.

Now the challenge, getting commuters where they intended to get earlier this morning.

Also, a live picture here. We're watching the now Coast Guard commandant, Thad Allen, as he officially takes over. President Bush is there for that ceremony, as well. Thad Allen, the vice admiral, assuming duties as chief of the U.S. Coast Guard and commanding officer. And we're just getting word out of Houston, Texas, there is a verdict in the Enron trial, the federal trial. It was Ken Lay and Jeff Skilling on trial for those charges and the huge Enron collapse, charges of fraud and other things that they're following as people -- I think our Ali Velshi is in Houston.

The verdict will be read within the hour and we'll have that for you here on CNN. Once again, the verdict is in, in the Enron trial for Ken Lay and Jeff Skilling in Houston, Texas.

Bird flu fears. A family tragedy in Indonesia causes concern for scientists worldwide. That is next on LIVE TODAY.

And the pope goes to Poland. A visit to the famous place of the birthplace of Pope John Paul II. Also an infamous place of death (ph), as well.

And no pity from one neighbor.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I feel sorry for her cellmate.

(END VIDEO CLIP)

KAGAN: Two little old ladies have a new address. Find out what sent them to the slammer.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

KAGAN: And we're learning at CNN that there is a verdict in, in the Enron trial. Former executives Jeffrey Skilling and Ken Lay on trial there, in charges of conspiracy and trying to conceal the crumbling finances of what was once the energy giant. The verdict in that trial is in. It's expected within the hour, and we'll have it for you as soon as it breaks here on CNN.

Meanwhile, our Ali Velshi has been covering the trial and the issues, and he has this backgrounder on what is at stake in this trial.

(BEGIN VIDEOTAPE)

ALI VELSHI, CNN CORRESPONDENT (voice over): Ken Lay was the boss. The former Enron chairman is charged with talking up the company's fortunes while he knew it was tanking. Lay's testified he didn't know what was going on right under his own nose. The prosecution said he did and charged him with six counts of conspiracy and fraud.

Lay's main defense was that he was out of the loop when chief financial officer Andrew Fastow created improper side deals, deals that were never accounted for, deals that Fastow admits were designed to hide Enron's debt and to pump up its appearance of profitability. Fastow is one of 16 former Enron executives to plead guilty.

Lay's right-hand man was Jeff Skilling, Enron's former president and CEO. Skilling was known as the idea guy. He's charged with knowingly defrauding Enron employees, investors, and the banks that loaned the company money. He faces 28 counts of conspiracy and fraud, including charges of insider trading.

Lay and Skilling have maintained their innocence throughout the trial, and in the four and a half years since Enron collapsed. Their lawyers were optimistic at the end of closing arguments.

UNIDENTIFIED MALE: We are very relieved that this part of the trial is over.

UNIDENTIFIED MALE: I'm not at all nervous. In fact, I feel better about the case than I've ever felt, that now it's over with, we made the presentation that we did. I think we made the points we set out to make, and now the jury will have an opportunity to call it the way they see it.

(END VIDEOTAPE)

KAGAN: And our Ali Velshi is on the scene there in Houston at the courthouse where this verdict will be read within the hour. Also, we have our Jeffrey Toobin, our legal analyst, on the phone.

And before I go to you, Ali, I want to go ahead and welcome our viewers that are watching with us all around the world on CNN International.

OK, the verdict comes in. These are the two biggest fish, I believe, in this Enron debacle.

VELSHI: Yes, there are -- there are lots of fish in this one. A lot of them have turned to support the government. I just spoke to Ken Lay as he walked in. He got word that the verdict is coming down. This would be the fifth day of testimony.

Now, there was a lot of speculation, Daryn, there would be three or four days of testimony and then there would be a verdict. But a few days ago, the jurors sent the judge a note to say that they will not be deliberating on Friday and on Monday. No one understood what that meant exactly, but yesterday the jurors sent a note to the judge to say, "Can we get some testimony if we need it?" And the judge responded by saying, "What testimony do you need?"

The jurors did not come back with a response to that. And then we got word just moments ago that a verdict will be read within the hour.

Now, there's all sorts of speculation as to what this means, but this is a very complicated case. And maybe Jeff can speak to this a little more clearly. It was a very, very complicated case, and the jury didn't ask for anything to be read back or explained again -- Daryn.

KAGAN: That's interesting. And we'll get to Jeff in just one moment.

For of all, for Ken Lay, though, there's really actually two trials that were taking place.

VELSHI: There's a bench trial that also took place. That wasn't heard by the jury. That started after Ken Lay's jury trial ended, when the jury went into deliberation. That was heard after the trial, and Ken Lay should be getting the verdict of that bench trial simultaneously.

KAGAN: At the same time.

VELSHI: And we'll find out about that. But compared to the -- compared to the numerous charges that Ken Lay and Jeff Skilling are facing, the bench trial is actually going to be, comparative, small potatoes.

KAGAN: OK. Very good.

Let's bring our legal analyst, Jeffrey Toobin, in, who joins us on the phone.

Jeff, does that surprise you, Ali's reporting there, that the jury hasn't asked in such a complicated trial to have any of the evidence read back?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: That's unusual. I wouldn't say it's unprecedented.

Jurors operate in different and sometimes mysterious way. There are even some judges who don't allow readbacks of testimony or of explanations of any legal instructions. They basically just say to the jury, you've heard it all, go decide.

Certainly, in a complicated white collar case like this, you would expect requests for readbacks, although certainly the length of the deliberations here is, I think, about what you might expect. There's a rough rule of thumb that lawyers use, which is one day of deliberation for each week of the trial.

This is the sixth day of deliberation. The trial was in the ballpark of six -- a little longer than that. So I wouldn't say it's very unusual, but a little.

KAGAN: Once again, Jeff Skilling and Ken Lay facing -- Skilling was charged with 28 counts of conspiracy, fraud and insider trading. Lay faces six counts of conspiracy and fraud.

How difficult to make a case like this, Jeff?

TOOBIN: I think this case was tough for the government. A lot of people, because the Enron scandal was so enormous and so many people lost so much money, they assumed that this was a slam-dunk case for the government. This was not.

This was purely an intent case. And what that means is, the government had to prove that what the -- Skilling and Lay were doing, they intentionally defrauded, that they intentionally lied. And the defense in this case, by both defendants, was, look, we did our best, we tried to save the company. There was a run on the bank. There was a collapse of the support for the company, but we were doing our best, and when we said that we thought Enron was a strong company we meant it.

And refuting that is what was difficult for the government. Maybe not impossible, but difficult.

KAGAN: Well, and what about the Ken Lay defense, you have somebody so brilliant to build up a company like this, but then when it comes to this, kind of a bunch of, "I didn't know what was going on."

TOOBIN: Well, you know, that's always the problem with these cases. But the really strong white collar cases always have an element of obvious fraud, like destruction of documents, or instructing people to lie. That wasn't present in this case.

The real villain in the Enron story that everyone agrees on is the former chief financial officer, Andy Fastow, who was personally enriching himself secretly on these cases. And that was not true of Skilling and Lay, and they could honestly say that they didn't know this was going on. And that was a big point in their favor in this case.

KAGAN: And in the Fastow case, both he and his wife ended up going to jail.

TOOBIN: Right. And both pled guilty. So they knew their goose was cooked. Skilling and Lay had a much more defensible situation.

KAGAN: Let's go back to Houston and bring Ali Velshi back in.

Ali, both men here took their -- took the stand in their own defense during this trial.

VELSHI: And, in fact, interestingly, Skilling was said to be fairly charming on the stand, did lose his cool a couple of times. But Ken Lay was a little more aggressive than people thought he would have been. And there are some people think the tide may have turned against Skilling when he went on -- when he took the stand and he sort of -- as much as Jeff Skilling and Ken Lay have tried to place as much of that blame as possible on Andy Fastow, the former chief financial officer, as Jeff was saying, the fact is the prosecution has come back to what you said, Daryn, you guys were running the company.

This is a big company. Everybody knows these guys are smart. In fact, one of the titles of one of the books written about this story is "The Smartest Guys in the Room".

So what's going to be interesting is whether the jury felt that they believed Ken Lay and Jeff Skilling that these shenanigans were going on underneath them and they didn't know about it, or whether they were in on it and they did approve of it. Andy Fastow did tell the court everything he did to line his pockets and to hide the company's debt was done with the authority of Ken Lay and Jeff Skilling.

KAGAN: Once again, if you're just joining us here in the U.S. or across the world, there is a verdict in the Enron case. This trail, this federal trial being held in Houston, Texas.

Two of the former chief executives, top executives of the company on trial here. We have Ken Lay and Jeff Skilling, and we have some graphics available to give you an idea of just how serious the charges are that these men face and what the jury has been looking at.

In the case of Ken Lay, he faces six counts of fraud and conspiracy. If convicted, he faces a maximum of 45 years in prison. Two counts of wire fraud, misleading statements at an employee meeting, and four counts of securities fraud, statements and presentations. And -- there we go -- and also one count of bank fraud and three counts of making false statements to banks.

And then in the case of Jeffrey Skilling, he faces 28 counts of fraud, conspiracy, insider trading, and lying to auditors. If convicted, he faces a maximum of 275 years in prison.

First to Ali, why was the list of charges so much more serious for Skilling than it was for Lay?

VELSHI: Partially because Jeff Skilling was brought in. They were both CEOs for a time, and then Jeff Skilling was the president of the company. But Jeff Skilling was brought in to really build this company up.

He was the brains of the operation. So he had a lot more going on.

There were a lot of charges that are related to Jeff Skilling that concerned manipulation of the stock, statements that he gave to investors and the public and the media that were deliberately, the prosecution says, misleading about the company's financial health. That caused the stock price to go up, and then -- and then Jeff Skilling is thought to have sold some stock to his own benefit.

It's a number of instances of that which apply to Jeff Skilling, as opposed to Ken Lay. So there are many more charges that Skilling faces that Lay doesn't face. In fact, the penalties and the charges that Skilling faces would send him to jail for longer than Ken Lay would go to jail if they were convicted.

KAGAN: All right, Ali. You're going to stay with us.

VELSHI: Yes.

KAGAN: Once again, we expect within the next 40 minutes the verdict to be read, this long list of charges against these former executives at Enron, Jeff Skilling and Ken Lay. You'll see it -- you'll hear about it first here on CNN coming out of Houston, Texas.

Our coverage continues out of Houston and New York City and Atlanta in just a moment.

We're back after this.

(COMMERCIAL BREAK)

KAGAN: I'm Daryn Kagan in Atlanta.

We're watching a story that is breaking out of Houston, Texas. A story that businesspeople all around the world are watching with us on CNN International, as well as across the U.S.

Enron, it was once the seventh largest company in the entire U.S. Today, it has come down to this, a verdict in the trial for Enron founder Ken Lay and former CEO Jeffrey Skilling.

The verdict is in. We expect it to be read in Houston, Texas, in about a half-hour.

Houston is where we find our Ali Velshi, who has been covering this story for some time. We will also go to Susan Lisovicz at the New York Stock Exchange, who has covered this story quite a bit as well.

Ali, first to you, the amount of time that the jury took to deliberate here, about what was expected?

VELSHI: About what a lot of people expected would be the case. This would be the sixth day, but the fifth full day, really, that they would have been deliberating.

We sort of had some word that the jury was -- you know, they weren't asking questions of the judge. It was a complicated case. They weren't asking for more testimony.

It seemed to me that after five days of testimony without them asking for major clarifications, they seemed to have understood or agreed on where they were going. Then we get the word that this verdict is in, and we will be reading it -- we'll be hearing it within about a half an hour now.

You just saw Ken Lay walk in a few moments ago. I asked him how he's feeling, and he said he's feeling good. Then his lawyer walked in after him and said it's been a long, long, hard trial, and that they're expecting -- you know, they're looking forward to the verdict.

So right now this is going to be, you know, the corporate trial of the century. This is the day everybody's been waiting for, all of those thousands of people who were put out of work at Enron and at Andersen, waiting to see what comes out of this jury at the federal courthouse in Houston within the next half an hour.

KAGAN: All right. Ali, stay with us.

Let's go to the New York Stock Exchange. That's where we find Susan Lisovicz.

(STOCK MARKET REPORT)

KAGAN: Meanwhile, Ali put together a story, gives us a good idea of how it came to this point, as we wait for the verdict to come in, in Houston. Let's take a look at that.

(BEGIN VIDEOTAPE)

VELSHI (voice over): Ken Lay was the boss. The former Enron chairman is charged with talking up the company's fortunes while he knew it was tanking. Lay's testified he didn't know what was going on right under his own nose. The prosecution said he did and charged him with six counts of conspiracy and fraud.

Lay's main defense was that he was out of the loop when chief financial officer Andrew Fastow created improper side deals, deals that were never accounted for, deals that Fastow admits were designed to hide Enron's debt and to pump up its appearance of profitability. Fastow is one of 16 former Enron executives to plead guilty.

Lay's right-hand man was Jeff Skilling, Enron's former president and CEO. Skilling was known as the idea guy. He's charged with knowingly defrauding Enron employees, investors, and the banks that loaned the company money. He faces 28 counts of conspiracy and fraud, including charges of insider trading.

Lay and Skilling have made their innocence throughout the trial and in the four and a half years since Enron collapsed. Their lawyers were optimistic at the end of closing arguments.

UNIDENTIFIED MALE: We are very relieved that this part of the trial is over.

UNIDENTIFIED MALE: I'm not at all nervous. In fact, I feel better about the case than I've ever felt, that now it's over with. We made the presentation that we did. I think we made the points we set out to make, and now the jury will have an opportunity to call it the way they see it.

VELSHI: If convicted, legal experts believe Skilling and Lay could face between 20 and 30 years in prison.

(END VIDEOTAPE)

KAGAN: And let's go back to Ali Velshi live in Houston. I want to ask you about those possible prison terms, because in your piece you say 20 to 30 years in prison. For Ken Lay that, that could be the rest of his life. But if you add up all of the charges, we're actually talking like 45 years for Ken Lay and 275 for Jeffrey Skilling.

VELSHI: Yes, and there's not a lot of thought that if they were convicted, that they would get the consecutive sentences. It would be typically concurrent sentences. And of course there are a lot of charges and they fall into different categories. So the jury may or may not, if they choose to convict on any of them, they may not convict on all of them. So that will determine, first of all, what the appeals process is, if there's a conviction, and it'll determine how much time they're going to spend.

But yes, for Ken Lay, today is an important day, because if this jury has decided that he is guilty of some these charges even. And on his separate trial, if the judge decides he's guilty, Ken Lay could go to jail. Ken Lay is not a young man.

KAGAN: No, he is not. He is in his 60s.

Also, during this trial -- we talked a little bit about this -- but during this trial, both men took the stand in their own defense. Was that considered a risky move?

VELSHI: Yes, it was. It was considered a risky move. But I think the defense understood that they have to humanize these two men. They are thought to be so smart and successful, particularly Jeffrey Skilling, who is often thought to be thought of as a genius. They needed to humanize these guys, and they put them on the stand. And when Jeff Skilling went on, it was largely thought of, of something that had worked. When Ken Lay took the stand, he got aggressive. And a lot of people thought, well, that might not work for him in the face of the jury. He got very defensive. He got very aggressive.

But both men put the blame largely on the shoulders of Andrew Fastow, who was the company's chief financial officer, who has, like 16 other former Enron executives, who has pled guilty and was cooperating with the government. They said he did it. He set up these phony companies that hit the companies debt. He lined his own pocket. He made side deals. And they said he was doing all of this and they didn't know about it.

Andrew Fastow and others testified that's not true, Lay and Skilling knew everything that was going on behind the scenes.

Bottom line here, Daryn, is the company executives are accused of pumping up the value of the company's stock, while knowing that it was in poor health. It was heavily in debt. Investors kept buying in. They couldn't get out of their shares. And in the end, billions and billions of dollars of money and thousands of jobs were lost while these guys, says the prosecution, knew what was going on.

KAGAN: All right, they'll have a better idea of their fate in less than a half-hour. The verdict will be read there for Ken Lay and Jeffrey Skilling, there in Houston, Texas, in the federal fraud trial and conspiracy trial of the Enron collapse. We'll have that for you as it breaks here on CNN.

More on that just ahead. Right now, a quick break.

(COMMERCIAL BREAK)

KAGAN: Once again, we're standing by about 25, 24 minutes in Houston, Texas. We expect a verdict to be read in the conspiracy and fraud case of Ken Lay and Jeffrey Skilling on the collapse of Enron. We have a number of reporters standing by, and we'll have that verdict for you as soon as it is read. We're also watching a story that's been developing over much of the morning here. Amtrak had a big power outage along the Northeast corridor, and a number of trains were stopped for a number of hours. They are slowly restoring power to the rails, but basically people had to get on the trains and walk to the nearest station. Thousands of commuters stranded, but Amtrak slowly but surely getting the power back on the rails and the trains moving once again.

Our Allan Chernoff is standing by at Penn Station with more on that -- Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: That's right, Daryn.

The power back on. The trains, well, they're beginning to run. It's going to take a little while until everything is back to normal. So far out of Penn Station, we know at least two trains leaving, one up to Boston and one down to Washington. There's another train down to Washington, the 9:35 a.m. train. It's boarding now, only two hours late, but at least the passengers were able to wait here safely. We certainly did have a much scarier situation for other passengers. Four trains, we understand, were actually stuck in tunnels between Manhattan and New Jersey, and Amtrak had to use diesel engines to pull those trains out of the tunnel.

We also know of one cancer patient who was coming up from Miami. She's on a train that is three-and-a-half hours delayed. There is an emergency medical technician waiting for her right here at Penn Station. Once she arrives, this cancer patient, she'll be escorted back to her home in Long Island. So certainly a major inconvenience for thousands and thousands of travelers this morning, but at least the power is back up. The train is beginning to roll once again -- Daryn.

KAGAN: Allan, any estimate on how long until everything is back up and running?

CHERNOFF: Reporter: You know, I asked that question of customer service just a few moments ago, and they simply could not give know me an answer. The board, the schedule board behind me in the waiting room, still the majority of trains, it says delayed. Although for most of the trains that are scheduled for a little later in the day, they still have their scheduled departure and arrival times up just on the board, and they seem to be OK, so it will probably be at least a few hours until everything is back to normal.

KAGAN: Allan Chernoff at Penn Station. Allan, thank you.

We're just days away from the beginning of hurricane season. President Bush making note of that today and talking about the upcoming season.

Let's go ahead and listen in to what the president had to say.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRES. OF THE UNITED STATES: America's 75 largest cities. The department is working closely with communities to identify any weaknesses in their plans and to find ways to improve them now. Secretary Chertoff has taken steps to reform FEMA, improve partnerships with the Red Cross and the Department of Defense, expand the amount of supplies the federal government has on hand.

We're also making it clear that all able-bodied Americans should have the resources necessary to sustain themselves for 48 to 72 hours after a disaster, so that emergency personnel can focus on saving those who can not help themselves.

I appreciate the many dedicated Americans who are working to prepare for this hurricane season. And I'm confident that if danger arrives, whether from nature or man, the United States Coast Guard will be ready.

(END VIDEO CLIP)

KAGAN: And that's President Bush making comments as Thad Allen is sworn in as the new commander of the U.S. Coast Guard.

Let's get back it our breaking news story, and that's happening out of Houston, Texas. Jeffrey Skilling just arrived, one of the defendants, just a couple of minutes ago at the federal courthouse in Houston, Texas. In about 20 minutes, the verdict will be read for Jeffrey Skilling and Ken Lay in the conspiracy and insider trading and fraud trial there in Houston, dealing with the collapse of Enron. It went from the seventh largest company in the U.S. to, in December of 2001, a collapse, leading into bankruptcy proceedings. We have a full team of reporters helping us with the coverage, and we'll have the verdict as soon as it's read here on CNN.

Right now a quick break.

(COMMERCIAL BREAK)

KAGAN: And once again, OK, we'll be seeing that tonight, 7:00 p.m. Eastern our coverage begins. British Prime Minister Tony Blair is here in the United States. In Washington D.C. He and President Bush will be holding a joint news conference, and you'll see coverage here on CNN.

Want to welcome our viewers that are joining us, not just here in the U.S., but all around the world on CNN International, and there is interest all around the world, because one of the biggest companies ever in the U.S. collapsed back in 2001, Enron, and two of the top executives face their fate in about 15 minutes. Ken Lay and Jeffrey Skilling will hear the verdicts in their trials in Houston, Texas.

To look at some of the charges here, Jeffrey Skilling -- or Ken Lay first. Ken Lay facing six counts of fraud and conspiracy, a combined maximum punishment, if he's convicted on all of the charges, of 45 years. Jeffrey Skilling facing 28 counts of fraud, conspiracy, insider trading and lying to auditors. He, if convicted on all charges, could face 275 years in prison. In either case, both men could be headed to prison for the rest of their lives, if they are convicted. And we'll find that out in about 15 minutes. While we wait for the verdict to come in Houston, Texas, we have Ali Velshi standing by with us, also we have Susan Lisovicz at the New York Stock Exchange, and momentarily we'll be talking with Jeffrey Toobin, our legal analyst.

Ali, first to you, a big part of the Enron story, not just these big executives, but so many Enron employees who lost their life savings. Have any of those former employees shown up there at the courthouse to hear these verdicts read?

VELSHI: I haven't seen them today. I haven't seen around. They've followed it very, very closely. Obviously, the local media in Houston is abuzz about this. Right now, as we're expecting the verdict, we have a crew at the home of one couple who lost their job and their life savings as a result of this. And what happened is -- and this is so typical of so many American companies -- people invest in their own company, so not only was somebody at Enron, regardless of what this verdict says, somebody at Enron, was being dishonest to the public and media about the health of that company. The investors were buying into the company, but so were employees. They were beefing up. So many of them had so much of their life savings invested in Enron. And when the stock tanked in 2001, this just crippled people. This was the end of people's lives.

There have been suicides attached to this case of Enron. This was the largest corporate failing in American history at the time. I mean, this is huge.

And then there was Andersen, the accounting company, which was found guilty in the shredding of the documents. Well, that company was destroyed, and thousands more people lost their jobs there. So this isn't a small matter. Somebody -- everybody in America has somehow been affected by this, whether as an investor or knowing someone who worked at one of the companies or lost their jobs -- Daryn.

KAGAN: Ali, thank you. Ken Lay sat down in 2004 and spoke with our Larry King. Let's go ahead and listen to a little bit of that interview.

(BEGIN VIDEO CLIP)

LARRY KING, CNN HOST: What do you say to employees, people who lost -- what do you say?

KENNETH LAY, FMR. ENRON CEO: I'm incredibly sorry. I mean, I grieve for them. I honestly still grieve for them and probably will until the day I die, Larry. As I said earlier, I've always taken my responsibility to my employees very seriously. I've always tried to provide opportunities for them, and indeed let them realize growth, and potential and even financial success, like they probably never dreamed of.

And indeed, Larry, we had the most creative, the brightest, most accomplished group of employees and certainly in -- certainly in our industry, maybe in many other industries. We were competing with the very best and biggest companies in the world for the best talent, and they loved working at Enron, just like I did. But I grieve for all that they've lost.

And we -- I mean even having lost what we lost, I mean, we are so much better off, my family is so much better off, than most of them, and it pains me each and every day of my life.

(END VIDEO CLIP)

KAGAN: Ken Lay talking about the impact of the collapse at Enron had on the thousands of employees in -- thousands of employees that worked for Enron.

Our Ali Velshi has been covering this story and is standing by. In about 10 minutes, we should hear the verdict from Houston, Texas.

Ali, it looks like you have a guest there with you. Who is that?

VELSHI: Yes, Tom Ajamie is an attorney in Houston, who has been with me working on this story since right in the beginning when Ken Lay was indicted. We were reporting on that together, and Tom and I were discussing what no information from the jury, no feedback meant. Just last night, we were talking about what that meant. Tell me what you think it meant? What do you think we're going to get in a few minutes?

TOM AJAMIE, SECURITIES ATTORNEY: Well, Ali, whatever it means, whoever wins this case, they won it by a clear margin. I mean, this is a blowout. This is unusual for a jury to come back this fast in a case of this complexity.

I represent investors every day on very complex cases. We try to get back money for people. We don't get juries back this fast. So whatever the decision, they made up their mind. And I'm going to say they probably walked into the jury room the first day, just last week as you know, and probably with one another and said, do you agree it's X? And they all said yes. And then what they did, they spent a couple of days just making sure that they were all sure, and that's it.

VELSHI: You've been following the trial the whole time. It's been complicated. There were accounting matters brought into it. Is it surprising that this jury didn't have to ask for any clarifications? What does that mean?

AJAMIE: It is. I means that whoever is going to come out the victor today -- and we'll find out just in a moments -- made their case very, very clearly, very simply and very clearly. Either the government made it very clearly that Ken Lay and Jeff Skilling lied, and they lied to investors, and that's clear to these jurors; or the defense lawyers made it clear there's a reasonable doubt here, and the jurors looked at each other and said, we have a doubt, and we're not going to convict these guys.

VELSHI: Now one of the things Daryn was asking was that, what does it mean, what was the impact of Jeff Skilling and Ken Lay's testimony? How did that help or hurt their cases?

AJAMIE: Well, there's general consensus that Skilling helped his case for sure, but that Ken Lay really hurt himself, that people had a very high image of Ken Lay coming into the case. But when he got onto the stand, I think there was a universal response by, you know, press, lawyers, for sure, who do these cases every day, that Lay really hurt himself and gave a very bad impression. So if things go against him, well, then clearly he's to blame. Obviously if he walks out a free man today, everyone's going to rethink that assessment.

VELSHI: What's the process after a verdict, whether it's conviction or acquittal?

AJAMIE: Great question. If the government loses, if there's an acquittal, the government can't appeal on our system. If the defendants, being Lay and Skilling, lose, they can appeal. They have the right to appeal. So this can go on for little bit longer if they're convicted today.

VELSHI: All right. And you feel that it doesn't mean anything other than the fact that it was a clear case to the jury that they're back this early; it doesn't mean acquittal or conviction?

AJAMIE: Too soon to say. But whoever wins, their lawyers made their case very, very clearly, we know that for sure.

VELSHI: And, Daryn, as you know, this has been a very, very complicated case. There was a lot of accounting involved, and the government wanted to try very hard not to confuse the jury, not to get them to glaze over and tune out, knowing that confusing the jury would result in acquittal, and this has happened before when the government has tried these cases, so they worked for four years to try and put forward a very straightforward case -- Daryn.

KAGAN: You still have Tom there with you, or he has walked away?

VELSHI: I do.

KAGAN: OK, he can't hear me, so I'll have you relay the question. I'm wondering -- to tap into his expertise --what does he make of the jury makeup, of the eight women and four men?

VELSHI: Tom, Daryn wants to know what you think about the jury makeup. And I remember we discussed this when the jury was chosen. It was a very, very rigorous process, a several-page document to choose these jurors.

AJAMIE: Right, a lot of detailed questions about the political beliefs, their background, what they do.

VELSHI: Who they admire.

AJAMIE: Who they like the most, exactly. And what they do with their money. Are they a saver or are they a spender? It was a very broad, almost a psychological test, that was given to them in a written form. And you might recall that Ken Lay walked out of the courtroom at the end of the day and said, we like this panel. No, I don't know if he's right or not, but he liked it and I'm going to assume that his lawyer said that we're happy with this jury of eight women and four men.

VELSHI: The jury was selected very quickly and you and I talked about the fact that could somebody with a vendetta have snuck onto this jury? And you felt not likely.

AJAMIE: You know, probably not likely. It's always possible that people hide their feelings, but a runaway jury type of thing is probably popular in Hollywood than it is in real life, in a court room.

VELSHI: And Daryn, as you know, there was -- there were many attempts on the defense to have this trial held somewhere other than Houston and Judge Sim Lake denied those requests repeatedly.

KAGAN: All right, Ali, thank you. And thanks to Tom, as well.

Let's go to the New York Stock Exchange. Our Susan Lisovicz has covered this story quite a bit, as well. Susan, you were pointing out that the government, you feel, actually, caught a couple breaks early on this trial?

SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, you know. It took years to bring this case to trial. You know, Enron, perhaps the biggest case of all. Wasn't the biggest bankruptcy, WorldCom was, but it was very difficult for the government to prosecute. And two breaks, which is something I'm sure Jeffrey will talk about and perhaps Tom if he comes back later on in the program.

One of them is an instruction that was given to the jury this month. It's known as the "ostrich instruction," and that is that willful or conscious ignorance, deliberate ignorance, is not a valid defense. That is something that Bernie Ebbers basically tried to use last year in the WorldCom trial. He said, well, you know, something was going on, but I wasn't aware of it. Jurors didn't buy it, and he was convicted. The government in that case derisively called it the "aw shucks" defense.

So the judge very explicitly told juries you could not -- you cannot use that defense. The other thing that happened, and this is quite sad, is that Ken Lay's lead counsel, Mike Ramsey, who was a very highly-regarded defense attorney in Houston, got sick. He had vascular surgery. He was out for a month. So that was the majority of the case.

And so when Ken Lay actually got on the stand and testified, and a lot -- there's been a lot of talk about how Jeff Skilling actually did better than Ken Lay. There was a popular perception it would be the other way around because Ken Lay is a very amiable kind of guy and Jeff Lay (sic) isn't quite as people-friendly. He didn't do as well. And one of the reasons why is he was being -- he was testifying in front of someone who he wasn't as familiar with. In fact, a lot of people who were in the courtroom said that he was actually kind of irritable when he was talking to his own lawyer, and that may be one reason why -- Daryn.

KAGAN: Susan Lisovicz at the New York Stock Exchange. Two men who once ran one of the most powerful companies in the world, within the next five minutes, they will find out their fate, in terms of the verdicts read in the Enron trial. Jeff Skilling and Ken Lay. We'll have that for you as the news breaks. Our coverage continues after this quick break.

(COMMERCIAL BREAK)

KAGAN: It is one of the biggest business trials in the history of the United States, and the world is watching and listening to hear what the verdict will be for Enron founder Ken Lay and former CEO Jeffrey Skilling. Within the next few minutes, the verdict in these trials will be read in Houston, Texas, in this federal courthouse.

Let's take a look and recap, while we wait for the verdict to come down, exactly what these men are facing. Ken Lay, the founder of Enron, could face up to 45 years in prison, if he is convicted on all charges. He faces six counts of fraud and conspiracy. The former CEO Jeffrey Skilling much, much longer list, twenty-eight counts of fraud, conspiracy and insider trading and lying to auditors. He faces a maximum of 275 years in prison, if he is convicted on all charges.

But, of course, this is a story that's just bigger than two former executives. It is one in which billions of dollars were lost in Enron. At one point, it was the seventh largest company in the United States, more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs were lost in the collapse of this company.

We have a full team of correspondents and experts to bring you through the verdict and talk us through. Ali Velshi there on the scene in Houston, Texas, getting ready to take in the verdict. Our legal analyst Jeffrey Toobin -- not Jeffrey Skilling, Jeffrey Toobin in New York City. And Susan Lisovicz, also in New York at the New York Stock Exchange.

Jeff, let's go ahead -- actually, before we go to you, I want to go back and listen to one of the man actually who will hear his fate in just a few minutes. Jeff Skilling, the former CEO, a man who ended up taking the stand in his own defense in this trial. Back in 2002, about a year and a half after the collapse of the company, sat down and talked with our own Larry King. Let's go ahead and listen in to what he had to say.

(BEGIN VIDEO CLIP)

JEFFREY SKILLING, FMR. ENRON CEO: I spent probably the most of my professional life helping to build Enron Corporation. I don't think there was anyone that was as shocked by the collapse of the company as I was.

LARRY KING, CNN ANCHOR: And now in retrospect, can you say, oh, I should have known it then or I should have seen this coming or shoulda, woulda, coulda. Retrospect, what could I do different? SKILLING: Well, you know, and I've said before, you know, I've gone back. And as I'm sure you would do, as anyone would do, I've gone back through the last five years of the company. I've thought about all of the decisions we made, some related to some of these issues that have come up subsequently, and I believe that, given the information that we had at the time, and the data that we had at the time, I think we made the right decisions.

KING: Did you have wrong data?

SKILLING: I think looking back on things -- I think we -- given what we had at the time, we made the right decisions, are the things that now, in retrospect with what I've seen happen to my company, would I have done some things differently? I think we all would do a number of things differently.

(END VIDEO CLIP)

KAGAN: And that is what former CEO of Enron Jeffrey Skilling had to say to our Larry King back in 2002, about a year and a half after the company collapsed.

Want to go ahead and welcome in Jeffrey Toobin, our senior legal analyst, who's watching and listening for this verdict from New York City.

Jeff, we've seen a number of white collar huge business trials take place here in the U.S. over the last couple of years. Has the environment changed in the conviction rate we've seen of these former executives?

TOOBIN: No. The vast majority of people who go on trial in federal court in any kind of case get convicted. And that's true in white collar cases as well.

And another point that's worth remembering is that the days of slap-on-the-wrist sentences are over. Bernie Ebbers, who is -- whose fraud was the only one bigger than Enron, is serving decades in prison. It's very likely he will die in prison. So, you know, we're talking about the stakes are enormous for Ken Lay and Jeffrey Skilling in this because they're going to go to jail for a long, long time if they're convicted.

KAGAN: And do you think that's why they went and took the stand in their own defense? They had to do everything possible to try to save their skin?

TOOBIN: Well, you know, what is interesting, especially about Skilling, as you just saw talking to Larry King, he's been very available.

KAGAN: Jeff, let me just jump in here because we're getting word that the jury has just entered the courtroom. So we do expect within the next few minutes that we will hear what the verdict is. So go ahead and finish your thought, but I might interrupt you. TOOBIN: Well, Skilling did not take the fifth. He has basically said, I'm going to tell my story, all along. So it's not a surprise that he took the stand. And Ken Lay hasn't been as open, and he did take the fifth somewhat, but I think it's very much in their favor that they took -- they took the stand. That -- I think even though they had some problems on cross-examination, I think they're better off having testified than not.

KAGAN: All right, Jeff. Thank you.

Let's go live to Houston. Ali Velshi standing by waiting to hear the verdict read.

Ali, we should explain just a logistics thing. This is the federal courthouse. And here in the U.S., there are no cameras allowed in the courtroom of federal courthouses.

VELSHI: That's correct.

KAGAN: So we're going to do it a little differently, as you are able to relay the verdict to our viewers not just here in the U.S., but all around the world.

VELSHI: That's correct. And we do have reporters in the courtroom and in an overflow room where you are allowed certain communication devices. And they are in contact with out control rooms. I will get those verdicts as they're read out.

The jury, as you said, has entered the courtroom, and they're going to come down with a decision now. They're going to deliver the decision that the world's waited for, for four years, since the collapse of what was once one of America's biggest companies. The fate of former chairman Ken Lay, former president of Enron, Jeffrey Skilling, now about to be heard in this federal court in Houston, where this case has been going on for four months -- Daryn.

KAGAN: OK. We will go back to you. Feel free to jump in as soon as you hear any verdicts being read.

VELSHI: Yes.

KAGAN: And I also understand Jeffrey Skilling's verdicts will be read first before Ken Lay.

VELSHI: They are -- that's the way the chargers are laid out. If the jury has the same page that I have, they will be asked on those charges -- Jeffrey Skilling's 28 charges are listed first. And then Ken Lay's charges will be listed.

And as you mentioned earlier, Jeff Skilling faces a number of charges that Ken Lay doesn't face. Some of those include false statements to auditors and insider trading.

Ken Lay is not facing any false statements to auditors or insider trading charges. Ken Lay only faces six charges, conspiracy to commit securities and wire fraud, wire fraud, securities fraud. Six charges in three categories.

So Jeff Skilling has a lot more to lose today. But no matter whether they're convicted or not, if they are convicted, they're not likely to serve these sentences concurrently. Most people we talked to have said that it might be 10 or 20 years if they're convicted on all these counts.

That said, there is still some betting that this jury came back very quickly without any questions of substance to the judge, without any readbacks, without any clarifications. Some people are suggesting that means it might be an acquittal.

KAGAN: All right. We will be listening. And you'll be listening especially closely. We'll be back to you momentarily.

First, though, I want to go ahead and welcome in Samuel Buell. He's on the phone with us, a former Enron task force attorney.

Mr. Buell, hello.

SAMUEL BUELL, FMR. ENRON TASK FORCE ATTORNEY: Hi. How are you?

KAGAN: I'm doing fine. I imagine this is a big day for you to watch as well.

BUELL: Well, sure. I worked on the case for a couple years of my life, and a couple more years were put on the case after I left. But it's much more important for the public and our financial markets, I think, than it is for me today.

KAGAN: Yes. Well, not you in particular. Why -- how do you think that the trial went?

BUELL: Well, it went very cleanly. I think everybody agreed that...

KAGAN: Hold on. Let me -- let me just jump in.

Let me go live to Ali Velshi.

Ali, go.

VELSHI: Ken Lay is guilty on all charges. We have just heard that Ken Lay has been found guilty by the jury in the Enron verdict, guilty on all charges for Ken Lay. Six charges right now that could net him 45 years.

Counts one through 35, guilty. Jeff Skilling has been found guilty on counts one through 35. Those are the counts of security fraud, conspiracy to commit security fraud, and false statements to auditors.

We're now waiting on the jury's verdict on the insider trading charges, charges 42 through 51 for Jeff Skilling. Until now, all of the other charges are guilty. Ken Lay guilty on all charges that he faces. Jeff Skilling on all conspiracy, securities fraud, and false statements to the auditors charges that he faced.

We're now just waiting on the insider trading. We're waiting for that verdict, Daryn. But it doesn't look good so far. If he's been found guilty on all of these, it means that we are -- it means probably bad things.

Let's bring Tom Ajamie in.

Bad things for Jeff Skilling on the insider trading charges?

Absolutely, Ali. I'm telling you, this is a clear-cut victory for the government. And not just that.

AJAMIE: The fact that this jury came back so quickly -- in a case like this, they usually -- before they send a man to jail, they want to deliberate for three or four weeks. The fact that they came back this fast means that this evidence was so overwhelming.

It wasn't just beyond a reasonable doubt. It was just a closed case from the beginning. The evidence was so overwhelming against these guys that these jurors walked back into it room last week, when they first assembled, and looked at one another and said, this is over, these guys are guilty. And it just goes to show the overwhelming amount of evidence against these guys.

VELSHI: And what were the -- you followed this. Was there anything obvious that Ken Lay and Jeff Skilling's lawyers can say it wasn't fair, it wasn't right, there's grounds for that appeal?

AJAMIE: It's going to be hard for appeal. Of course, they will appeal.

Now, I'll tell you the one ground (ph) that I'll say. Maybe these jury issues, you know, the issues that are sent to the jury and they're asked to answer yes or no, these type of things, there's been some discussion as to whether they were properly submitted.

And I'll tell you, Arthur Andersen commission, which happened in this exact same courtroom here in Houston...

VELSHI: And that was the paper shredding, the document shredding relating to Enron.

AJAMIE: Correct. Arthur Andersen, the accounting firm, tore up all the documents, and the government charged them with obstruction of justice. That was...

VELSHI: Ken Lay is now guilty on -- charges against Ken Lay have now come in. Those are the bench trial charges. He has been found guilty on those. That was a separate trial that was not part of the jury trial. That was held by the judge.

Tell us a little bit about that and what that means. AJAMIE: In front of the judge, it was a bank fraud trial. Essentially, it was, did Ken Lay lie when he signed bank documents?

VELSHI: In order to get loans?

AJAMIE: Loans. He wanted to borrow some money, and he promised on the bank documents -- and apparently there was testimony, he was told face to face, don't use this to buy stock. And he lied and he went and bought stock. But the judge who heard that -- just in front of the judge -- has found him guilty now.

Ken Lay is going to go to jail -- I'm literally not exaggerating -- we're talking over 100 years of jail time.

VELSHI: Right. Now, they're probably going to be consecutive rather than concurrent?

AJAMIE: Correct, yes. But he's going to be in jail for the rest of his life unless he -- unless he's successful on appeal.

VELSHI: What was the separate case about? Why was that not part of the normal jury trial? Why was Ken Lay tried separately on these few charges that he's just been found guilty on?

AJAMIE: The judge decided that these were something that he needed to hear as a legal matter. There was not a dispute on certain facts, but there were some legal decisions he needed to make. So if you don't have a dispute on certain facts...

VELSHI: Skilling is found -- we're just getting not guilty on -- how many charges is he found not guilty on? Jeff Skilling has been found not guilty on at least one of the insider trading charges that he faces. He faces several of them.

And we're just getting word now, Daryn, on what that is right now.

Charge 42, which is where they begin, is not guilty so far. We are just waiting for that. That's interesting.

Not guilty on charge 44, 45, 46, 47, 49, and 50. It appears that Jeff Skilling has been found not guilty. Those are all of the insider trading charges, 42 through 50.

We're waiting on 51, Todd. Do we have a verdict on 51?

OK.

Daryn, 42 and 43 are not guilty. Looks like Jeff Skilling is not guilty on the insider trader charges.

Tell me why that would be the case? What does that mean?

AJAMIE: Didn't believe that he traded on any inside secret information. When he bought and sold his stock, he was relying on the same information that the public had available, too. So he didn't do anything sneaky in selling his stock.

I'll tell you, though -- and that's good for him, obviously. But the fact that he was found guilty on those preceding charges we already went through, that's a lot of jail time here. We're talking tens and tens and tens of years.

VELSHI: Yes.

Just to clarify for our viewers, the insider -- and that's Jeff Skilling you're seeing on the screen -- the insider trading charges were that Jeff Skilling, knowing that the company was in trouble, knowing that the company was going down, sold stock at high levels and lined his own pockets. That was the -- that was the allegation against Ken Lay -- against Jeff Skilling, who then left the company. The jury has not found him guilty on the insider trading charges.

AJAMIE: That's correct. That's exactly right. So they're going to let him walk on that. They think that when he has traded his stock and sold some of his stock, that he had the same information that everyone else in the public had.

VELSHI: And those were -- those are several charges, each with 10 years of a maximum penalty. So out of his maximum penalty, that's a lot lower, because he had over 200 years if you added them all together.

AJAMIE: Well, that's right. But now we're talking about, is it going to be 100 years in jail or 200 years in jail? I'm not sure either one really matters. It's too much time, and you can't live that long.

VELSHI: Daryn.

KAGAN: Yes. And a quick question to Tom, if you can ask him. And this is to follow up on you, why does he think this long list of charges? Does he think they were able to make the successful argument about insider trading?

VELSHI: Why -- why do you think the prosecution wasn't able to make -- Daryn wants to know -- make a good case on the insider trading matter? It seems that they were meticulous on all other fronts.

AJAMIE: They were. They obviously did an excellent job here as far as getting a conviction.

The defense lawyer, the lawyer for Mr. Skilling, really did put out a lot of information to the jury that the information that Skilling was supposedly trading on, or the fact the company wasn't doing well, was pretty well known at the time. And there's probably some truth to that.

There were some of the business publications and business newspapers and some of your programs, some of them talking about possible rumblings and problems at Enron. Although, no one knew the company was going to collapse. VELSHI: And the allegation of insider trading, Daryn, specifically refers to not general information that you know, but specific information that's not -- not available to the public.

AJAMIE: Exactly. It's material information, very important information. Investors would like to know, but they don't know it. But you know it. And you're a guy inside the company and you're using that to your benefit.

VELSHI: Daryn, one of the things that is interesting here is that the Sarbanes-Oxley bill that we all live by today in business came out of, in part, this -- this collapse and others like WordCom and Adelphia.

Now, could the same things that these two men are now convicted of, could they happen again today?

AJAMIE: You know, Ali, I hate to tell you, but I think they could happen today. We always put in laws. We have since the great crash of 1929. Institute more and more laws to try and prevent fraud.

But if people who run corporations want to cheat, there are ways to cheat. And they can hire lawyers, they can hire accountants, or if they're clever enough they can do it themselves.

So I say to the investors I represent and the pension funds I represent, the people I try to help who have lost money, you still have to be on guard. There's really no complete safeguard.

VELSHI: And Daryn, one of the issues now is that those investors that Tom talks about and the those -- those workers who lost their jobs and their livelihoods, it's not -- it's some vindication and closure for them, but their lives don't come back as a result of this. This city of Houston was hurt very badly by the collapse of Enron. Enron was one of the biggest employers in this city and has had a major, major presence in this city for a long time -- Daryn.

KAGAN: Understand. Well, Ali, good work. Thank you.

And we're hearing that the Department of Justice plans to have a news conference in about an hour. This is a culmination of four years of work of investigation and prosecution and basically a slam-dunk for the government.

Ken Lay found guilty of all of the charges that he was facing in the Enron collapse trial. And Jeffrey Skilling, the former CEO of Enron, guilty of almost all of the charges that he faced, except the insider trading. He faces at least 25 years in prison. And Ken Lay also facing a number of years in prison, as well.

Let's bring in Jeffrey Toobin, our own legal analyst who's been watching this unfold out of New York City.

Jeffrey, any other way to say it except a slam-dunk for the government?

TOOBIN: Well, slam-dunk in terms of the results. Slam-dunk not in terms of the process.

This was not an easy case for the government. I think this is a tremendous victory for the Department of Justice. These prosecutors did a fabulous job pulling this case together.

It took a long time. I mean, it's been four years since Enron collapsed. That's a long time between -- for an investigation and a case to come to trial. But they did it.

And the result is a slam-dunk, but they had to -- they had to defeat an enormously well-funded defense effort and a very complicated set of facts. And I think it's just a tremendous tribute to these prosecutors.

KAGAN: The next phase will be the sentencing phase. The days that white collar criminals got a slap on the wrist, especially of this high caliber, those days are long gone, aren't they, Jeff?

TOOBIN: Long gone. The one thing that Lay and Skilling somewhat have going for them is that the federal sentencing guidelines are no longer mandatory.

Judges are suggested to follow them. Most judges do. But if they had been mandatory, there would have been no doubt that both of them would be serving decades in prison.

Now there's a little more play in the joints, but frankly, you know, given the magnitude of this crime, given the fact that the jury found in essence that both of them lied on the witness stand repeatedly, I don't think the judge is going to feel much sympathy for them. So I think they're going to go to jail for many years, both of them.

KAGAN: And just so you know their ages, Jeffrey Skilling is 52. And Ken Lay is 64. It's possible, depending on the sentence, how it works out, these men could be going to prison for the rest of their lives.

TOOBIN: It is indeed quite possible. And that's a chilling thought, but, you know, Congress, when they made these sentencing laws, they really thought white collar crime need to be punished severely. The bigger the crime, the bigger the stakes, the longer the sentence.

And, you know, this was seventh -- number seven on the Fortune 500 that just sort of disappeared in a matter of a couple weeks. So it was a big deal.

KAGAN: All right. Jeff, thank you.

We're going to get some more coverage in. We're going to take a quick break.

We're actually hoping to hear from some former Enron employees, those that lost their entire life savings in the collapse of Enron.

Also, in about an hour, the Department of Justice will be holding a news conference with reaction. Our continuing coverage continues.

CNN is your most trusted name in news.

I'm back after this.

(COMMERCIAL BREAK)

KAGAN: And our coverage continue. The verdicts are in, once again, in the Enron trial. Founder Ken Lay found guilty in all counts in the fraud and conspiracy trial in a federal court in Houston, Texas. And Jeffrey Skilling, the former CEO, found guilty on most of the counts that he was facing.

Let's go ahead and welcome back in Samuel Buell.

We were talking to you just as the verdicts were coming in. Former Enron task force attorney, you worked on this for about two years, I understand, before you left the case. You reaction, please, to these verdicts.

BUELL: Well, this is a tremendous victory for the American investor. A lot of people are looking at this as the government versus the defense. But we need to take a step back and remember what happened in late 2001.

This was a stunning shock to the confidence of the investor in our stock market, that a major Fortune 7 company could have been constructed in a way that was completely deceiving to the average investor. And to have unraveled that and have proved in the court of law that was fraud is a remarkable, remarkable victory, really, for our legal system, and ultimately for confidence in our financial markets.

KAGAN: On a scale of one to 10, how difficult to paint that picture for a jury?

BUELL: A 10. I mean, this was the most complicated white collar case in history. Many have said every white collar case that came before this one was algebra and this one was calculus.

It took years. It took enormous resources. And there was always the question, was Enron just too complicated to explain in a court of law? And the government did a masterful job in this trial, reducing it down to a few simple concepts in telling the story.

KAGAN: You were talking about the losses. We have some of those numbers to paint that picture of what was lost as of December, 2001 -- more than $60 billion in market value, almost $2.1 billion in pension plans, and 5,600 jobs lost.

Samuel Buell, former Enron task force attorney, thank you for your insight today.

Let's go back to Houston, Texas, the site of this federal trial.

Ali, any kind of reaction? Our Ali Velshi is standing by.

Any kind of reaction at that courthouse right there?

VELSHI: Well, I mean, this place is abuzz. There are federal marshals, there are lights on top of police cars. People are walking by, saying, "Have we got a verdict?"

And by the way, Daryn, I just want to update you. We now have the final two that we were waiting for on Jeff Skilling.

He is guilty on one insider trading charge of the several that he was charged with. He's been found not guilty of most of them, guilty of one. So 19 out of 28 charges Jeff Skilling is guilty of.

Ken Lay, the former chairman -- chairman and CEO of Enron, is guilty on all charges, six out of six charges.

And we are now waiting on the jury. We are waiting on press conferences. And, of course, we're waiting on Jeff Skilling and Ken Lay being ushered out of this courtroom, we expect, in handcuffs.

This is a very grim day for these two men who have maintained their innocence all along, for the last four years now. This is -- there's no shortage of people in Houston, Daryn, who are outraged about -- about what has happened. And as a result, the defense said that they couldn't get a fair trial in Houston.

But this judge, Sim Lake, a very highly regarded judge -- I'm sorry, Daryn, we're just getting this. Sentencing will take place on September 11th. September 11th is the date when Ken Lay and Jeff Skilling will be sentenced.

It was December 1st of 2001 when Enron declared bankruptcy. So it will be -- it will be on September the 11th that Ken Lay and Jeff Skilling will face sentences on the charges that they've been convicted of -- Daryn.

KAGAN: It didn't seem possible for 9/11 to take on a different meaning, but when these two men...

VELSHI: A new significant meaning, that's right.

KAGAN: Yes. It will. And once again, the kind of prison terms we're looking at possibly here, Ali, for each of the men?

VELSHI: Well, the prison term consecutively for Ken Lay adds up to about 45 years under the sentencing guidelines.

Ken Lay is to surrender his passport, Daryn. And he's to put down a cash bond. We don't know the amount. But Ken Lay is now being ordered by the court to surrender his passport, which means he may not be handcuffed and shackled, taken out of this court, because they're taking away his right to travel out of the country.

Ken Lay, if he goes to jail under the -- no home confinement for Ken Lay. We're just hearing this.

So until -- until they are sentenced, Daryn, Ken Lay will not be confined to his home. He will be able to walk around. He will be free. He has to surrender his passport, and he will be putting in a cash bond.

We're waiting to find out what the terms will be for Jeff Skilling until sentencing on September 11th.

Ken Lay, as I tried to say a couple of times but keep getting this news in here, 45 years or so if those charges, if those convictions are served concurrently. But we have been talking to lawyers.

In fact, I want to ask Tom Ajamie -- you don't have to come in, Tom. I just wanted to ask you, what are we thinking about the sentencing for these two -- these two guys? I have been hearing 20 or 30 years?

AJAMIE: A lot longer.

VELSHI: Tom Ajamie, a securities attorney who has been helping me out throughout this trial, says that Judge Sim Lake, who presided over this trial for the last several months, is a law and order judge, in Tom's words, which means that he's probably going to interpret this sentence fairly strictly. And he said that that 20 to 30 years that we've been hearing is not going to be it. It will be longer than that, according to Tom.

And so that's where we are right now. These charges, if you add up Jeff Skilling's charges, add up to a lot longer. Either way, it looks like Ken Lay will -- if he doesn't succeed on an appeal -- will spend the rest of his life in jail.

Still, Daryn, that doesn't -- that doesn't account for the billions of dollars that were lost by those investors, by those workers who lost their life savings. And right now, while one chapter closes for those people who have been watching the story very closely, the rest of their lives continue. And those lives are, in some cases, very empty and very impoverished.

KAGAN: Yes. Well, and it turns out we have one of those former employees on the phone with us right now.

And Ali, thank you. We'll be back to you in just a moment.

And just to fill you in on the ages, Jeffrey Skilling is 52. And Ken Lay is 64. So with long prison sentences, there's a good chance that both of these men will spend the rest of their lives in prison.

Want to go to the phones. Garrett Ashmore is on the phone with me right now, a former Enron employee who says he lost his life's savings when Enron collapsed in December, 2001.

Garrett, thank you for calling in.

GARRETT ASHMORE, FMR. ENRON EMPLOYEE: No problem.

KAGAN: What is your reaction to these verdicts?

ASHMORE: Well, I tell you, it's bittersweet. In one sense, it's finally a small bit of justice for all the hundreds of thousands of employees and individuals who have lost their life's savings in Enron.

KAGAN: Tell me a little bit of your story. First of all, how old are you?

ASHMORE: I'm 30 years old and started at Enron when I first got out of college. And had the -- at the time, the fortune and opportunity to help start their broadband company.

KAGAN: And how long did you work there?

ASHMORE: I worked there for three years, but it's like working dog years there. Seven years for every year at Enron.

KAGAN: And how much money would you say you lost in all?

ASHMORE: I lost enough to retire and to be able to live off of interest.

KAGAN: Can you give me a dollar figure?

ASHMORE: I would rather not. It's too painful to even really talk about it.

KAGAN: All right. I'll respect that.

At 30, I guess the only thing you have on your side, though, is time. Some of the other employees being older and not having the same luxury of being able to try to rebuild their nest egg.

ASHMORE: Yes, absolutely. I can't tell you how many of the husband and wife couples who both worked at Enron, and had worked there for 20, 30 years, as predecessors to Enron, who were literally months away from retiring before the -- before the Titanic sunk.

KAGAN: I don't know how it's going to work in the sentencing on September 11th, but if there was a chance for people like you to go and address the court, address Jeff Skilling, address Ken Lay, what would you have to say to them?

ASHMORE: Boy, that's a great question. You know, I think that the jury has said enough today.

I mean, they truly got hammered today. And I hope and I think that it was a fair and open and honest trial. So I think that alone speaks for itself.

KAGAN: Garrett Ashmore, thank you for your comments today.

A former Enron employee who says he lost his life savings in the collapse of Enron in 2001. Once again, the verdicts are in, in the Enron trial. Ken Lay being found guilty on all six counts that he faced. And Jeffrey Skilling being found guilty on 19 of the 28 counts that he faced in that federal trial.

Our coverage continues. We expect to hear from some of the jurors. We will hear from some of the attorneys.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

KAGAN: And we go live to Houston. Here is Jeff Skilling and his attorney in the wake of the guilty verdicts.

Let's listen in.

DAN PETROCELLI, SKILLING'S DEFENSE ATTORNEY: On behalf of Mr. Skilling, I would like to thank everyone. This is a difficult process for everyone. And everyone's treated us with utmost courtesy and respect and cooperation.

We had a trial. It obviously did not come out the way we had hoped. It doesn't change our view of what happened at Enron, and it certainly doesn't change our view of Jeff Skilling's innocence.

The jury saw it differently. That was their right. And we will take it from here and continue to fight the good fight.

This is obviously a very, very difficult time for Mr. Skilling, his children, his family. There's a lot of thinking to do about the next steps that we take. But we're going to stand behind him. As I told him, we have just begin the fight.

So again, thank you, all. If you have any questions, I'll be happy to try to answer them, but I want to be brief.

QUESTION: Jeff, do you think you can ever -- do you think you will ever be able to admit to yourself that you may have committed crimes?

JEFFREY SKILLING, FMR. ENRON EXECUTIVE: No.

QUESTION: Why not?

SKILLING: Because I didn't.

But I would just like to thank my -- first of all, I would like to thank Dan for all his support and everything that he made happen. I would like to thank my family for sticking by me, particularly my kids, Kristen (ph), Jeffrey, and J.T. (ph). They're just great.

And I think we fought -- we fought a good fight. And some things work, some things don't.

So -- but thank you, guys, because you really have been very polite, very pleasant. And I appreciate it.

QUESTION: What plans do you have?

PETROCELLI: We're going to sit down and take a look at everything. And I know there are a number of issues that we litigated hard and lost before the trial, and even during the trial. It's too early for me to try to comment on that, but we will have a full -- we will have a full and vigorous appeal.

QUESTION: Did you expect the jury to come back this rapidly? I mean, this was five days. I mean, you know, I realize you can't guess on that, but...

PETROCELLI: You can never tell. Yesterday we got a note that they wanted exhibit lists, and we all speculated they were going to be in there a bit longer. So we were a little surprised today, but they gave it five full days, and they saw it their way, so...

QUESTION: You had said that you wanted to fight -- you would fight with every ounce of your body, everything -- something along those lines earlier. Do you still feel that way? And If you do, will you tell us about it?

SKILLING: I still feel that way. Absolutely feel that way.

QUESTION: Can you expand on that a little bit?

SKILLING: Not much to expand on. We're going to have to go back and I guess think this thing through. But, obviously, I'm disappointed. But, you know, that's the way the system works.

PETROCELLI: Thank you, folks. Thanks a lot.

QUESTION: Do you think you would have had a different result if this case was tried elsewhere?

KAGAN: Some brief comments there from Jeffrey Skilling, just getting some terrible news for him. Convicted on 19 of 28 counts that he was facing, could be going to prison for the rest of his life. But you saw his attorney there, Dan Petrocelli. They definitely have plans to try to appeal. What they would appeal on -- you heard one of the reporters yell the question of whether there would have been a different outcome if this was not held in Houston, Texas.

Let's bring in our legal analyst Jeffrey Toobin for some comments on that. Is that enough to appeal on, that the trial was held in the wrong place?

TOOBIN: You know, that is often raised on appeal in high profile cases. It almost never succeeds. Again, when we talk about appeal, it's always worth remembering that the vast, vast majority of convictions are affirmed on appeal. Reversals are very rare. So, yes, there will be an appeal, but there did not appear to be any glaring errors in the conduct of this trial, and...

KAGAN: Jeff, you also made a point earlier that you said most federal trials, the defendants are found guilty?

TOOBIN: Oh, overwhelmingly. And actually, if you think about it, it's probably good that that's true. We wouldn't want our government indicting scores and thousands of innocent people. I mean, most people who go to trial are guilty. You know, obviously, a lot of people plead guilty. So that screens some people out of the process.

But, oh, I think the number in federal court is something like 90 percent. Because, you know, the resources of the federal government are considerable. And as I say, most people are guilty. So you don't get a lot of acquittals.

Here you had enormous resources on the part of the defense. Dan Petrocelli -- I think a lot of people may remember Dan Petrocelli because he was the verdict for the Goldman family, Ronald Goldman's family, in the O.J. Simpson civil case. And he won a tremendous, perhaps only symbolic, victory for the Goldman family in the civil lawsuit against O.J. Simpson for the murder of Ron Goldman and Nicole Brown Simpson in Santa Monica after his criminal conviction. He got a verdict of over $12 million against O.J. Simpson. Virtually none of it has ever been paid, but Dan Petrocelli did a magnificent job, especially when he cross-examined O.J. Simpson. But he learned today, you don't win them all.

KAGAN: You don't. And for those people saying where did I see that guy before...

TOOBIN: That's probably where people know him.

KAGAN: That would be the answer.

Let's go back live to Houston. Our Ali Velshi is standing by as this all unfolds outside the courthouse in Houston -- Ali.

VELSHI: Daryn, the one charge that Jeff Skilling was -- the one insider trading charge that Jeff Skilling was found guilty of -- I'm just finding out -- relates to some stock that he sold on September 17, 2001. Now, you'll remember, that was the first day that the stock markets opened after the September 11th attacks. And he started unloading about half his position in Enron. Now he said at the time that he was selling in response to these weak markets, the September 11th markets. But it turns out that that wasn't the case, because he was otherwise selling stock. He was unloading Enron stock. And that was -- those were the insider trading charges that he faced. That was some of them. He was found not guilty on nine of those, but guilty just on that one insider trading charge.

Jeff Skilling was found guilty on 19 of the 28 charges that he faced. Ken Lay, guilty on all six that he faced. Jeff Skilling's wife -- you just saw Jeff Skilling with Daniel Petrocelli, his attorney. Jeff Skilling's wife didn't make it to court in time for the verdict. I guess a lot of people didn't expect that to happen. We have a reporter in the courtroom. And, of course, now that court is adjourned, we'll be finding out about what happened in the courtroom. Ken Lay's wife was there, but she did break down when the verdict was read. We are waiting for Ken Lay now, or his attorney, to make a comment and tell us what they plan to do. But Ken Lay, found guilty of six out of six counts. And right now, over my shoulder, way back behind me, there's sort of an army of media here. In the distance, there are police horses. They've been here before in this trial to control crowds. There are marshals and there are police vehicles there in front of that podium. Right over my shoulder there, that's where we're going to expect Ken Lay to come out. And obviously, there are a lot of angry people around, so the police are insuring that things are safe in front of the federal court here in Houston, Daryn.

KAGAN: Understandable. And when we see Ken Lay, or when you do, and his attorney, we'll go back live right to Houston. Meanwhile, I want to go back to New York City. And Jeffrey Toobin, on these charges of insider trading -- and Ali was making an interesting point. He was -- Jeff Skilling found guilty on only one of the counts of insider trading. Interesting that they would go for that one, but not convict on the others.

TOOBIN: You know, in a way, that will help the government win on the appeal. Because sometimes when a verdict is simply wall to wall convictions, the appeals court can listen to an argument that says, look, the jury didn't pay attention to the evidence. They just sort of convicted him on everything. And here, the government is going to be able to say, look, this is a jury that obviously paid close attention to the evidence. They convicted on some charges, acquitted on others. And that's the kind of thing an appeals court is often very receptive to, because they're -- they can be confident this wasn't some runaway crazy jury that just hated these people from the get-go. This was a jury that actually paid close attention to the evidence.

KAGAN: September 11th will be the sentencing. It looks like the two men will be allowed to be free until then?

TOOBIN: It does. And that's not an automatic. A lot -- again, one of the ways the law has changed in recent years, it's a lot harder for defendants just to get out on bail. It's harder to get out on bail pending appeal. It's harder to get on bail pending sentence, then bail pending appeal.

So one of the issues that's going to come up in the sentencing, I'm sure, is whether Skilling and Lay go right to prison on the day of the sentencing. And that could have enormous immediate stakes, because an appeal, in a case this complicated, could easily take a year. So expect a real fight at sentencing about whether they get bail pending appeal. It's a very different question.

KAGAN: Well, then there was the Martha Stewart tactic, where she said, well, forget it, I'm going to appeal, but I'm just to going to go ahead and go to prison. Of course, she only had to go -- not for the rest of her life.

TOOBIN: Big difference, serving six months in Camp Cupcake, versus decades in somewhere a lot less pleasant. KAGAN: Absolutely. We'll continue our conversation as our coverage continues as well. Once again, Jeffrey Skilling, the former CEO of Enron, found guilty on 19 of 28 federal counts that he was facing, and Ken Lay found guilty on all six charges. Both men could be headed to prison for the rest of their lives.

As our coverage continues, we will hear from Ken Lay's attorney. We expect to -- perhaps Ken Lay himself. And we're also expecting to hear from the jurors. How were they able to come to a decision in a time span that most people, or some people, consider to be relatively quick? CNN is the most trusted name is news. Our coverage continues after this.

(COMMERCIAL BREAK)

KAGAN: I'm Daryn Kagan. Our coverage continues here on CNN. I want to welcome our viewers around the world that are watching our coverage coming out of Houston, Texas, one of the largest business scandals in American history, Enron, and its collapse. One chapter comes to a close today as two of the most powerful men in this company at one time face their verdicts. And the verdicts are guilty. Jeffrey Skilling, the former CEO, being found guilty on 19 of 28 counts he faced in this trial.

And the founder of Enron, Ken Lay, being found guilty on all six charges that he faced in the trial. Both men could be headed to prison for the rest of their lives. They will be sentenced on September 11th, after the summer is over.

Meanwhile, this is such a big story because Enron at one point was the seventh largest company in all of the United States. As it collapsed, in December of 2001, along with it went a company, many jobs and many live savings. More than $60 billion in market lost as it declared bankruptcy in 2001, almost $2.1 billion in pension plans, and 5,600 jobs lost as well.

The verdicts were read within in the last hour. Jeffrey Skilling, the former CEO, came out of the federal courthouse, along with his attorney, Dan Petrocelli, and had this to say.

(BEGIN VIDEO CLIP)

DAN PETROCELLI, SKILLING'S DEFENSE ATTY.: The jury saw it differently. That was their right. And we will take it from here. And continue to fight the good fight. This is obviously a very, very difficult time for Mr. Skilling, his children, his family. There's a lot of thinking to do about the next steps that we take. But we're going to stand behind him. As I told him, we have just begin the fight.

(END VIDEO CLIP)

KAGAN: And you can tell Dan Petrocelli and Jeffrey Skilling definitely planning to appeal. Those comments you heard live just a few minutes ago here on CNN. They're in Houston. So is Ali Velshi.

So we've heard from Jeffrey Skilling, but so far, not from Ken Lay.

VELSHI: Yes, we're expecting that we'll hear either from Michael Ramsey (ph), we saw him coming in, Ken Lay's attorney, or from Ken Lay himself. They walked in separately. I spoke to both of them as they went it. Ken Lay said to me, I'm feeling good. And then when Michael Ramsey came by and I asked him what he was expecting, he said, a verdict.

So now we're going to find out what their plans are. We have heard that the sentencing, as you said, will be on September 11th. Until then, Ken Lay will not be held in custody. He will be released after placing a cash bond and surrendering his passport. We're just waiting to hear what the conditions of Jeff Skilling's release. But those two men will be free pending their sentencing on September 11th, and of course pending some sort of appeal that we will expect to be filed on their behalf.

Remember that through this entire, entire thing, Ken Lay and Jeff Skilling have insisted that they didn't do anything wrong. And in fact, not just that, Daryn, but they argued the case that there weren't crimes committed, that Andrew Fastow, Andy Fastow, the former CFO, committed crimes. He set up these phony companies to hide Enron's debt and to deceive shareholders and other executives.

But these guys say there wasn't a crime. Things went bad, people sold out of the stock, and the company went bankrupt. So this is a very complicated and interesting trial. This was a very, very big job for this jury to make sense of this all. It was four years in the making that the prosecution took to make this case -- Daryn.

KAGAN: I have a question for you to follow up, but I want to let you know that we're hearing from an affiliate in Houston, KHOU, the television station, that we expect we will hear from the jury and hear their explanation of how they came to these verdicts, but we will not see them. So when we hear them -- I'm not sure exactly how they're setting that up. But when that happens, we will share that with our viewers here in the U.S., and across the world as well.

Actually, we have a chance to listen in. Here's the jury that convicted Ken Lay and Jeff Skilling.

(BEGIN AUDIO CLIP)

QUESTION: ... keep going through and keep going, knowing that you were going to reach that verdict today?

UNIDENTIFIED FEMALE: I don't think we have the target of reaching a verdict today. We were well prepared to stay here as long as it took to have the right verdict, one that all jurors were unanimous in, and that the evidence supported. We were not on a timeline.

QUESTION: How do you spell your first time?

UNIDENTIFIED FEMALE: D-E-B-O-R-A-H.

QUESTION: What is your occupation?

UNIDENTIFIED FEMALE: I work in human resources for a large oil company.

QUESTION: What is your occupation?

UNIDENTIFIED FEMALE: Teacher.

QUESTION: What type of teacher?

UNIDENTIFIED FEMALE: Elementary teacher.

QUESTION: I would like to add my thanks for coming here today. Was there any particular pieces of evidence or witnesses that most impressed you in coming to your verdicts?

UNIDENTIFIED FEMALE: My name is Samantha Perry (ph). And I'm a medical assistant.

And I was actually an alternate, so I got an easy part. But one of -- for me, personally, Mark Conan (ph) was very, very professional on the stand. He knew what he was talking about, he knew details, and he seemed like he was very familiar with everything that happened.

UNIDENTIFIED MALE: Yes, my name is Freddy Delgado (ph) -- Freddy Delgado -- D-E-L-G-A-D-O. And I would say that Ben Glisan's testimony, we kept on going back to that testimony to corroborate things. I believe that it was one of the best witnesses that was brought forward.

QUESTION: And your occupation?

UNIDENTIFIED MALE: I'm an elementary school principal.

QUESTION: Anybody else?

UNIDENTIFIED MALE: D-D-Y.

UNIDENTIFIED FEMALE: My name is Wendy Vaughan. And for me, it was the actual defendants. I wanted very, very badly to believe what they were saying, very much so. And there are places in the testimony where I felt their character was questioned. Wendy Vaughan, V-A-U-G- H-A-N.

QUESTION: Could you offer any specific piece of testimony that struck you that part of their earlier testimony didn't work for you, or...

UNIDENTIFIED FEMALE: Can I do that?

No. I'd rather not.

QUESTION: What's your occupation, ma'am?

UNIDENTIFIED FEMALE: I'm a company owner of two companies.

(END AUDIO CLIP)

KAGAN: Fascinating questions there. A chance not to see the jury there. Of course there's always a question in the federal courthouse here. They're not always comfortable using cameras, but we could listen to reporters as they interviewed jurors who just moments ago convicted Ken Lay and Jeffrey Skilling in the Enron trial. Once again, if you're just joining us, Ken Lay found guilty on all six counts that he faced, and Jeffrey Skilling guilty on 19 of the 28 counts that he faced.

Some of the occupations on this jury, human resources representative, medical assistant, a school principal and a business owner. Bring Ali Velshi in.

Ali, that last juror that we listened to, very interested comments. She said she really wanted to believe these men as they took the stand in their own defense, and it sounds like she really wanted to, and yet just wasn't able to. She wasn't specific about what didn't wash for her, though, about what they had to say on the stand.

QUESTION: And Tom Ajamie, who we were talking to earlier, was standing with me when I was -- when we were talking about that, and he and others who have been watching this case feel that when Jeff Skilling and Ken Lay took the stand, particularly Ken Lay, he may have hurt his case, because what they needed to do with these two guys who were so wealthy, and so smart and so above everything is to humanize them so that this jury could feel that in fact they were regular guys and maybe made mistakes, but weren't committing crimes, and certainly weren't out to destroy people's lives.

But when Ken Lay got up there, he was aggressive, he was defensive, he was short tempered, and a lot of people say that hurt him.

Jeff Skilling's testimony, a lot of people say, may have humanized him more, because he is such a smart man, and he was widely regarded to be one of the smartest men in the business world. The idea that he took the stand did maybe did soften him up a little.

But in the voice of that one juror, she wanted to believe, she wanted to hear something, she wanted to feel that character, and it doesn't come across.

KAGAN: Question to follow up before we went to the jury and listened to them. You were talking about Andy Fastow. He pled guilty. His wife did, too. And he then went ahead and he testified in this trial as well. In the end, will he serving less prison time than these men? Is it possible?

VELSHI: The government is very clear in - of all of the executives, and Andy Fastow was the biggest of them, who pled guilty, was very clear that these agreements were not always cooperation agreements; they were plea agreements. These people plead guilty, and the sentencing would be determined after outcome of the trial. Now that the government has secured a conviction. It's quite likely that they will look at the information they got from Andy Fastow, and the testimony and look kindly on his sentencing.

Now just before the trial was supposed to begin in January, there supposed to be three men on trial. The third one was the chief accounting officer, Richard Causey. It was a joint defense. They had separate lawyers, but they were being tried together. Richard Causey flipped and pled guilty.

Now, as a result of the chief accounting officer and financial officer -- the two guys who would know whether Lay and Skilling were involved in this -- as a result of those guys working with the government, that really strengthened the government's case right now.

So Andy Fastow was the biggest of the big fish, but having Richard Causey come over helped the government's case a lot. So if I were Andy Fastow right now, I'd be hoping that, you know, he cooperated as much as he could and that they're going to smiling on him.

KAGAN: We will see how that works out. So he's just in prison waiting to find out how long he stays there?

VELSHI: Yes, I think Andy Fastow has not been -- he has not started serving his -- he's pled guilty and they're going to -- the sentence will be imposed once they determine what sentence it's going to be. He could get -- I mean, in many of these cases, they have got sentence guidelines or numbers that they've attached to these sentences which could be brought down, but no promises.

KAGAN: Yes, and I think they worked out a deal where his wife went and served her time and then she comes out ...

VELSHI: Because of their kids.

KAGAN: Right.

VELSHI: Yes, and that was really quite something to see that, that his wife was also part of this and they had to -- that the judge allowed them to be -- for her to serve her time so she could come out and be free when he starts to serve his time.

But these people -- the government didn't give anybody a break on this. Everybody who has cooperated with the government and plead guilty, all of these executives are going to serve jail time. And in fact, the defense used this.

Every time one of those executives got on the stand to testify against Lay and Skilling, the defense said, wait a minute, you couldn't fight this anymore. You took a deal to avoid a harsher penalty for yourself. And frankly, you ran out of money to keep on defending yourself. So they were trying to imply that the government -- that all these senior executives who testified against Lay and Skilling did so to save their own hides.

KAGAN: Clearly, the jury did not buy that argument, once again, coming back with a verdict. All six counts against Ken Lay guilty, Jeffrey Skilling guilty on 19 of 28. Sentencing will be on September 11.

Our coverage continues. We're still waiting to see Ken Lay come out of the courthouse and hear from him and his attorneys. We're back after this.

(COMMERCIAL BREAK)

KAGAN: It is a major chapter in American business history. Two Enron executives, former executives, the founder, Ken Lay, found guilty on all six counts that he faced in a federal fraud trial. Also the former CEO Jeffrey Skilling, he has been found guilty on 19 of the 28 counts that he faced.

It happened in a Houston courtroom just within the last hour. As our coverage continues, let's check in with our senior legal analyst Jeffrey Toobin who is watching the story unfold from New York City -- Jeff.

TOOBIN: Well, Daryn, you raised a really interesting point a few minutes ago about Andy Fastow, who I think by any standard is the most culpable, the most corrupt, the most crooked person at Enron. He's going to end up with a much better deal than his bosses, Jeff Skilling and Ken Lay, because Andy Fastow flipped.

He made a deal and he cooperated, and he is going to have years, perhaps decades less time in prison than his bosses. And the federal government and the federal system rewards cooperators big time. And Fastow certainly played his cards very well.

KAGAN: And so as a message, when the government comes after you -- and I'm asking you as a former federal prosecutors, that you were. The government comes after you, you cooperate or you face the rest of your life in prison?

TOOBIN: Well, you know, you should cooperate if you're guilty. I mean, obviously, some people to trial because they think they're not guilty.

KAGAN: Jeff Skilling and Ken Lay would say they're not.

TOOBIN: Well, you know what? That ship has sailed. They're convicted felons today. So I think they, obviously, made the wrong decision. And Fastow was in a perfect position because he wasn't the top guy. You always need someone you can give up, but he was someone who knew everything that was going on.

And, you know, morally, it's tough when you have someone who is clearly, you know, terribly culpable and really a bad, corrupt person, giving that person a better deal than somewhat less culpable people, but that's how the federal system works. It's how many states work. And it really contributes to the efficiency of the system. But it is something that people have some qualms about.

KAGAN: All right, Jeffrey, thank you.

Once again to wrap up the hour that we've been watching, Jeffrey Skilling found guilty on 19 of 28 counts, and Ken Lay found guilty on six of all six. They will be sentenced on September 11. Both men could face the rest of their lives in prison. Both say they do intend to appeal.

Our coverage continues here on CNN, also on CNN International with Kyra Phillips. I'm Daryn Kagan as international news and CNN continues at the top of the hour.

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