Skilling says he's 'absolutely innocent' - East Valley Tribune: Business

Skilling says he's 'absolutely innocent'

Font Size:
Default font size
Larger font size

Posted: Monday, April 10, 2006 12:11 pm | Updated: 4:58 pm, Fri Oct 7, 2011.

HOUSTON - Former Enron Corp. Chief Executive Jeffrey Skilling declared he was "absolutely innocent" Monday as he began to testify in his own defense in his fraud and conspiracy trial.

The 52-year-old one-time corporate celebrity whose reputation as a business wunderkind shattered along with the company he once ran also said he "never ... not once" considered making a deal with prosecutors the way more than a dozen other Enron executives did.

"I will fight those charges until the day I die," Skilling said.

Skilling, known for his plainspoken manner and bravado as he led Enron's transformation from a staid pipeline company into an energy trading giant, addressed jurors directly, his eyebrows raised slightly, looking earnest and alert.

He acknowledged being nervous as his lawyer, Daniel Petrocelli, began his questioning.

"I guess in some ways my life is on the line, so I'm a little nervous," Skilling said.

Although he has faced harsh questioning from investigators before, this is the first time federal prosecutors who have pursued him for years will have an opportunity to grill him.

But the cross examination likely won't come until midweek or later.

Petrocelli noted that among the Enron executives who pleaded guilty to crimes and agreed to cooperate with prosecutors were Skilling's friends and co-workers. The defense has maintained throughout the 11-week trial that most of them did so in response to government pressure to avoid trials or lengthy prison terms and were actually innocent.

Petrocelli asked Skilling if he thought his former co-workers were guilty.

"I would say the vast majority who testified here are in my opinion not guilty," Skilling said without naming names.

Skilling described how Enron consumed his life and how, as it grew into a successful company, he decided to find some personal balance.

"I guess you could say I was obsessed with Enron," he said. "Every day was intense, and I had not spent the time I should have spent with my family. ... As time went on, and the company became more successful, that was something that mattered more to me."

But he also said he told Enron founder Kenneth Lay on "that fateful day, Friday, the 13th of July," that he wanted to resign after 11 years with the company because he was bothered by Enron's falling stock. He also said he told Lay that he believed he had lost credibility with Wall Street after calling a hedge-fund worker an obscene name during a conference call when the worker questioned Enron's financial figures.

"The now-infamous ... quote was used as an example of, I don't know, arrogance or something. It wasn't meant that way," said the former CEO, who has a reputation for arrogance.

Skilling repeated his twice-made assertion that Enron was in "very good condition" when he left the company in August 2001 and that he never would have jumped ship if he'd known it was going to collapse into bankruptcy proceedings less than four months later.

"It's almost inconceivable now what happened," he said.

Earlier, prosecutor John Hueston continued pressing former general counsel Jim Derrick on Monday to highlight Enron's cursory response to August 2001 memos from Sherron Watkins, then an Enron vice president, who warned Lay about possibly shady accounting related to financial structures backed by the company's stock. The note, which won Watkins fame when released by Congress the next year, came days after Skilling unexpectedly resigned as chief executive officer.

The crumbling structures were unwound in the third quarter, forcing Enron to report hundreds of millions of dollars in losses.

Last week, Derrick in part served as a lead-in to Skilling. Through him, Skilling's lawyers sought to counter prosecution testimony that he failed to approve deals Enron conducted with partnerships run by former Chief Financial Officer Andrew Fastow, as required. Derrick testified that Enron's board approved procedures that required the review and approval of former Chief Accounting Officer Richard Causey and former Chief Risk Officer Rick Buy, but not Skilling.

Fastow testified earlier in the trial that he used the partnerships, with Skilling's knowledge, in part to help Enron manufacture earnings.

Lay and Skilling are accused of repeatedly lying to investors and employees about Enron's financial health when they allegedly knew fraudulent accounting propped up weak business ventures. The two men say there was no fraud at Enron other than that committed by Fastow and a few others, who skimmed millions from secret schemes, and that bad publicity coupled with lost market confidence drove the company to seek bankruptcy protection in December 2001.

Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy.

Skilling, 52, has maintained his innocence of any wrongdoing since the initial, explosive aftermath of Enron's swift flameout.

In lengthy testimony with Securities and Exchange Commission shortly after the bankruptcy filing, and two contentious appearances at congressional hearings in February 2002, Skilling said he knew of no accounting tricks to hide debt or inflate profits. He also insisted he believed Enron was financially strong when he abruptly resigned in mid-August 2001, citing personal reasons.

But then, investigators had just begun Enron probes. In court, Skilling - and later, Lay - will face prosecutors who have investigated him and the company for years.

  • Discuss

'EV Women in Business'

A PDF of the Tribune special section, featuring a mix of sponsored content from our loyal advertisers and newsroom coverage of the East Valley business community.

Your Az Jobs