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Enron’s Skilling says never falsified earnings

April 11, 2006

By Matt Daily

HOUSTON (Reuters) – Former Enron CEO Jeffrey Skilling on
Tuesday told the jury at his criminal trial he never ordered
subordinates at the energy company to illegally falsify profits
to please Wall Street.

Skilling’s testimony on his second day on the witness stand
contradicted statements made by former Enron executives who
testified earlier in the trial the company had manufactured
profits with Skilling’s consent.

“Did you ever have a single conversation where you sat down
with anyone at Enron where you said in so many words, ‘Look
we’re not cutting it, we need to break the law?”‘ Skilling’s
lawyer Dan Petrocelli asked.

“No, I never did that,” Skilling answered.

Skilling, 52, and former Enron CEO and Chairman Kenneth
Lay, 63, are being tried in federal court on charges they lied
to analysts and investors about the financial disarray at the
company that was once the seventh largest in the United States.

Enron’s December 2001 collapse into the then-largest ever
U.S. bankruptcy was the first in series of corporate scandals
that rocked the financial world and led to stricter disclosure
rules for companies.

Leading Skilling through the indictment, Petrocelli
questioned him about the prosecutors’ contentions that the
conspiracy to disguise the Enron’s true financial state began
in 1999.

“There is no truth whatsoever to that allegation,” Skilling
said.

Earlier in the trial, former Enron investor relations
executives Mark Koenig and Paula Rieker and former Enron
accountant Wesley Colwell testified that Enron used accounting
tricks to increase earnings in 1999 and 2000.

Skilling has portrayed Enron as a healthy, vibrant company
even up until his resignation in August 2001, less that four
months before it filed for bankruptcy.

He and Lay contend Enron collapsed after investors lost
confidence and triggered a “run on the bank” after learning
former Chief Financial Officer Andrew Fastow had skimmed tens
of millions of dollars from partnerships he operated that
bought up Enron assets.

Fastow, who struck a cooperation agreement with prosecutors
and will serve a 10-year prison sentence, testified earlier in
the trial that the deals with his LJM partnerships were
designed to hide billions of dollars in losses at Enron while
inflating its earnings.

Skilling faces 28 charges of conspiracy, fraud and insider
trading, and Lay faces six charges of conspiracy and fraud.

Both men have pleaded not guilty and face decades in prison
if convicted at the trial that began at the end of January.


Source: reuters



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