- The Washington Times - Monday, April 10, 2006

HOUSTON (AP) — Former Enron Corp. Chief Executive Officer Jeffrey Skilling told jurors in his fraud and conspiracy trial yesterday that he abruptly resigned from the energy trading company a few months before it collapsed because he was worn out and troubled by its falling share price — not because he knew disaster loomed.

“I am absolutely innocent,” Mr. Skilling said right after he swore to tell the truth while testifying in his own defense.

Then he let jurors know what is at stake for him:

“I guess in some ways my life is on the line, so I’m a little nervous.”

As he testified, he became more relaxed and conversational, with no hint of the swaggering bravado for which he was known when he ran what was once the nation’s seventh-largest company. Known for his plain-spoken manner as he led Enron’s transformation from a staid pipeline company into an energy giant, Mr. Skilling addressed jurors directly, his eyebrows raised slightly, looking earnest and alert.

At times he appeared self-deprecating, even telling jurors that he was admitted to Harvard Business School “by some huge mistake.”

He repeated what he said twice before congressional panels in 2002, that Enron was “in very good condition in the middle of August [2001] when I left.”

His attorney, Daniel Petrocelli, asked whether he had any clue that Enron would flame out in scandal less than four months later.

“Not in my wildest dreams, no. It’s almost inconceivable now what happened,” the former CEO said.

“Would you have left if you thought the company was going to experience the events that later transpired?” Mr. Petrocelli asked.

“No,” Mr. Skilling replied matter-of-factly.

The 52-year-old ex-CEO’s testimony kicked off the 11th week of the federal trial. His co-defendant, Enron founder Kenneth L. Lay, aims to testify later this month.

Both are accused of repeatedly lying to investors and employees about Enron’s financial health when they reportedly knew fraudulent accounting propped up a facade of success. Enron careened into bankruptcy proceedings in December 2001, six weeks after announcing unprecedented losses and a massive equity write-down that generated intense scrutiny from once-adoring Wall Street and regulators.

The two men say there was no fraud at Enron other than that committed by former Chief Financial Officer Andrew Fastow and a few others, who skimmed millions of dollars from secret schemes, and that bad publicity coupled with lost market confidence sank the company.

In staccato fashion, Mr. Petrocelli asked Mr. Skilling whether he ever destroyed documents or computers, set up offshore accounts to hide money or did anything to hide past behavior or dealings. Each time, Mr. Skilling said, “No,” sometimes accentuating his answer by leaning forward.

“Did you leave town?” Mr. Petrocelli asked.

“I went to Fredericksburg,” Mr. Skilling replied, eliciting courtroom laughter at his referral to a small town a few hours’ drive away.

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

If convicted of all counts, Mr. Skilling faces a maximum of 275 years in prison and tens of millions of dollars in fines, though an actual prison term likely would exceed two decades. Mr. Lay faces a maximum of 45 years in prison if convicted of the six counts against him.

Jurors took notes and listened intently as Mr. Skilling spoke. His first wife, Susan Skilling, and their daughter and two sons — ages 22, 19 and 15 — watched his testimony, flanked by Mr. Skilling’s second wife, former Enron corporate secretary Rebecca Carter.

The ex-CEO described how Enron consumed his life and how, as it grew into a successful company, he decided to move on because he had neglected his family and his “head wasn’t in it anymore.”

“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.”

He also said he told Mr. 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 price.

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