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Enron Trial; Coretta Scott King Passes Away; A Look at Last Year's State of the Union

Aired January 31, 2006 - 11:31   ET

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

DARYN KAGAN, CNN ANCHOR: Opening statements are under way in the trial of two former Enron executives. They're accused of orchestrating the massive fraud that led to the company's collapse, but they deny any wrongdoing.
Business news correspondent Chris Huntington is covering the trial. He joins us live from Houston, Texas.

Chris, good morning.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Daryn, good morning.

The government has just finished presenting its opening statements. The federal prosecutor, John Houston, doing, I have to say, a masterful job of storytelling, because the big challenge for the government here is to make this a story about lying, plain and simple, and not a mired, mucky story about complex accounting rules.

Houston laid out with several examples what he says was a pattern of Jeff Skilling and Ken Lay telling the facts of how poorly the company was doing to other executives in the company, while publicly lying to investigators and regulators.

And as something kind of unusual, Daryn, in an opening statement, John Houston played several audio tapes juxtaposing what Skilling and Lay were saying privately within the confines of the Enron offices and then what they were saying publicly. One such example, Skilling saying in really strong terms, boy, I've never seen the market so bad. We have no customers, no revenue, and then in terms of chronology, just a couple of days later, Ken Lay saying publicly, things are going fine, we love the market right now.

So that's really going to be the essence of the case going forward, that these two men lied, chose to lie. That's how the government is going to make their case. They have to talk about these off-the-book deals, these famous deals that were created by Andrew Fastow. That could be a pitfall if they get too stuck down in the complex accounting rules there.

But again, the essence of that, as the government says it will show, is that this was all an attempt to hide all the bad stuff and just brag about the good stuff.

Finally, perhaps the most compelling bit of the opening statement was in the end when John Houston lays out the fact that both Jeff Skilling and Ken Lay sold millions and millions of dollars of Enron stock in the late fall of 2011, when, as the government contends, they knew the company was in trouble. We'll get the opening statements from the defense team starting in a few minutes -- Daryn.

KAGAN: And then the defendants saying, well, it wasn't against the law; it might not have been traditional business methods, but we didn't break any laws.

HUNTINGTON: That's what they certainly are going to say, and they may be able to get some traction on that about the off-book deals, which were approved by accountants and lawyers at the time. But when you juxtapose how badly the company was doing, at least as far as the government says, and what Skilling and Lay were saying publicly, and there's an awful lot of public record there, that's going to be very, very difficult to defend against.

And keep in mind, of course, the government has on its side several key former Enron employees, Andrew Fastow, the chief financial officer, and Sherron Watkins, the famous whistle-blower who Ken Lay in the famous memo that things were just going to implode in a wave of accounting scandals. She was correct. She was on the scene. She knew the facts. She's going to tell them to the jury.

KAGAN: Chris Huntington, live from Houston. It should be fascinating to watch this unfold. Thank you.

Getting back to one of our lead stories of the day. Coretta Scott King, the widow of Martin Luther King Jr., has passed away at the age 78. The Reverend Jesse Jackson is joining us now his thoughts on Coretta Scott King and her life and legacy.

Reverend, good morning.

REV. JESSE JACKSON, CIVIL RIGHTS ACTIVIST: Good to be with you today, a day of great sadness, and yet great joy, an enduring legacy of a freedom fighter, wife, (INAUDIBLE) and mother of four children. She was indeed an authentic freedom fighter.

KAGAN: Share with us a memory that you have with Mrs. King that others of us might not have been privy to reverend, please?

JACKSON: Well, maybe the most painful was when Dr. King was shot in Memphis, and I felt compelled to call her at the bedside phone, and said to her that he had been shot. I tried to cushion it by saying he had been shot in the shoulder, as opposed to the neck. She in truth knew what had happened, because she had suffered this pain when their home was bombed in Montgomery, when he was stabbed in New York, when he was bricked in Chicago. And from that traumatized state, she emerged organizing that funeral with great taste and dignity, led a march of 50,000 workers rights in Memphis, Tennessee, and she never stopped marching, built the King Center, helped lead the drive to the King holiday, the free Nelson Mandela. So in own right, she really was an authentic freedom fighter.

KAGAN: And any concern about where the King legacy goes from here? There's been a lot of public attention about how the four children have kind of split sides about what the future of the King Center should be and how their father's legacy should be handled?

JACKSON: I think that's exaggerating. You know, we were raised, children who were grew up in the public eye. Life is tough. I mean, we grew up children in a fish bowl, not competing forces for their lives, but her legacy is secure. That's unfinished business, the fact that the courts have been stacked with right-wing judges anti, what she stood against. I mean, Mr. Bush came to Atlanta one day to honor the King's birthday, and then sent up a -- sent up a recommendation to kill affirmative action, laid a wreath at Dr. King's gravesite and put forth a judge who was (INAUDIBLE) at the time of a cross burner. We're fighting awesome forces today, and yet she did not flinch in the face of these anti-civil rights, anti-labor, anti-women's rights times. And so from Montgomery to Cerrato (ph), today we feel her loss and we felt her presence.

KAGAN: Reverend, I don't know how much you've been in touch with the King family in recent days, but we're just getting word here at CNN, confirming that actually Mrs. King was at a rehab facility in Rosarito Beach, Mexico, which is just across the California border in Baha, California. Do you know anything about the treatment she had gone to seek or the kind of choices the family had made to get her to recover from the stroke that she had had earlier this year?

JACKSON: Well, (INAUDIBLE), we were traumatizes by the announcement she had the stroke, and then she seemed to have been getting better. But her age and given the severity of it, we knew she was quite sick, but did not know that death was imminent. So her children were doing all that they could do to give her the best medical treatment to us sustain her life. We thought that she was doing much better, but the end came, came suddenly.

But again, I repeat to you, her legacy as a freedom fighter, in the tradition of Winnie Mandela, and Constance Baker Motley and Shirley Chisolm, her legacy is secure, her work is unfinished, and that is our duty to finish it.

KAGAN: Reverend Jesse Jackson, thank you so much.

JACKSON: Thank you.

KAGAN: Once again, Coretta Scott King dying at the age of 78. And CNN just learning this news, that actually was in Mexico At a rehab facility in Rosarito Beach, which is just across the California. More on that as we learn about why the choice the family made to send her there.

Coming up, a mother and father who are hard to forget.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Something inside of me still says to this day, if we just hadn't opened the door.

(END VIDEO CLIP)

KAGAN: Last year, they took a seat of honor at the president's State of the Union Address. We'll visit again with the family of a fallen Marine.

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KAGAN: President Bush is looking to tonight's State of the Union speech as a way to energize his second term. The president is expected to talk about energy, education and health care and outline the progress he says has been made in the global war on terrorism.

One thing to watch for in tonight's State of the Union is the president's attempt to personalize his message. Our White House correspondent Dana Bash revisits a Texas family whose personal loss in Iraq took center stage during President Bush's last State of the Union speech.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): His dress blues hang in the hall, near the flag that draped his casket. You may not remember Sergeant Norwood, but you were introduced to him this time last year.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Byron Norwood of Pflugerville, Texas, who was killed during the assault on Fallujah.

BASH: His parents were VIP guests, as the president read a letter from mom, Janet.

BUSH: "He just hugged me and said, 'You've done your job, Mom."

JANET NORWOOD, MOTHER OF SOLDIER KILLED IN IRAQ: "It's my turn to protect you now."

I was just floored. You know, it was pretty unreal.

BASH: So was this embrace with an Iraqi woman, Safia.

(APPLAUSE)

J. NORWOOD: The expression in her eyes was an expression that Byron had described to us as the look of hope. I couldn't have stopped myself from hugging her.

BASH: Safia keeps in touch with e-mails from Iraq.

J. NORWOOD: We seem to have a whole lot in common, just as women, as mothers.

BASH: E-mail from Byron had been so precious, Janet put a baby monitor next to her computer to hear the knocking sound at night when he logged on.

One night, it sounded different. She woke her husband, Bill.

J. NORWOOD: You know, he was going to go to the computer. And I said, no, Bill, it's not the computer. I could see the brass buttons reflecting the light of the -- a sight I will never forget. You know, there's something inside of me still says to this day, if we just hadn't opened the door.

BASH (on camera): So, this table is always like this?

(voice-over): Fourteen months later, his memory is everywhere, picture, scrapbooks, letters. Bill reads his son's journal.

BILL NORWOOD, FATHER OF SOLDIER KILLED IRAQ: "They did it for us in the other wars, World War II and such. And now it is my turn."

BASH (on camera): How does that make you feel?

J. NORWOOD: Incredibly proud.

B. NORWOOD: Just incredible.

BASH (voice-over): We called the Norwoods last summer, when another mom dominated the news. They wanted no part of it.

(on camera): When you hear somebody like Cindy Sheehan saying, my son died in vain, what does that make you think?

J. NORWOOD: It makes me angry, because our son did not die in vain, and I don't believe her son did either.

BASH (voice-over): Part of coping is writing to Byron's comrades back in Iraq for a third tour. This is also where Janet mailed her White House letter, a post office now named for her son.

J. NORWOOD: This is the one that's modeled after Byron.

BASH: And they helped build a war memorial in a park where Byron played as a boy and dreamed of being a Marine.

J. NORWOOD: I love seeing his face.

BASH: They come here often to remember -- so hard to let go.

Dana Bash, CNN, Pflugerville, Texas.

(END VIDEOTAPE)

KAGAN: And as we look forward to tonight's speech, CNN's primetime coverage of the State of the Union begins at 7:00 p.m. Eastern in "THE SITUATION ROOM." Wolf Blitzer and Paula Zahn will be there. That's followed by our live coverage of the president's speech at 9:00.

I'm back after this.

(COMMERCIAL BREAK)

KAGAN: Our "Daily Dose" of health news begins with more ammunition in the fight against the flu. Drug maker Roche says that the European Union has approved Tamiflu to prevent influenza in children in Europe. The idea that one family member comes down with the flu, Tamiflu can keep it from spreading. Roche says children are three times more likely than adults to get the flu. U.S. regulators approved Tamiflu for kids here and that happened last month.

Major new study showing 7.9 million children are born with a serious birth defect every year. The March of Dimes says that 70 percent of these cases could be prevented, many of them in poorer countries. Sudan has the highest rate of birth defects, while France has the lowest. The study cites poor maternal health care, the higher percentage of older mothers and the frequency of marriages between relatives as the leading risk factors there.

For your "Daily Dose" of health news online, log onto our Web site. You'll find the latest medical stories, special reports and a health library. The address is CNN.com/health.

We'll take a break and be back after this.

Actually...

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KAGAN: I'm Daryn Kagan. International News is up next. Stay tuned for YOUR WORLD TODAY. I'll be back with the latest headlines from the U.S. in about 20 minutes.

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