- The Washington Times - Saturday, March 2, 2002


Former Enron Chief Executive Officer Jeffrey Skilling, whose testimony to Congress is being challenged, says he couldn't have overseen everything at the company and faults lawmakers for "acting as judge and jury" in an election year.

No one should expect in the aftermath of Enron's collapse that a top executive would have known everything or been the one to "close out the cash drawers" every night, he said in an interview aired last night on CNN's "Larry King Live."

Mr. Skilling told Mr. King he believed "we made the right decisions" before Enron collapsed into the biggest bankruptcy in U.S. history on Dec. 2.

He appeared with his attorney, Bruce Hiler, who told Mr. King that he does not fear Mr. Skilling being indicted on criminal charges in the Justice Department's investigation of Enron.

"I do not think that should be in the cards," Mr. Hiler said. "A lot of facts have to come out yet."

Said Mr. Skilling: "The United States Congress has decided that I am guilty until proven innocent."

By contrast, he said, Congress has treated as a "heroine" Enron Vice President Sherron Watkins, who testified that Mr. Skilling "duped" former Enron Chairman Kenneth Lay and the board of directors.

"Sherron's entitled to her opinion. Sherron's not entitled to her own facts," Mr. Skilling said.

He said he would wait to see the facts emerge before pointing a finger at anyone, such as former Chief Financial Officer Andrew Fastow, who ran the web of partnerships that were used to hide more than $1 billion in debt and eventually toppled the company.

Angered by lawmakers questioning the veracity of his sworn testimony, Mr. Skilling raised the possibility yesterday that he will no longer cooperate with the House Energy and Commerce Committee.

If "the tenor of your inquiry slides even farther into a 'show trial' whose only purpose is to convict my client before all the facts are in, then we fail to understand the value in your inquiry," Mr. Hiler wrote senior members of the committee.

He said lawmakers on the panel "repeatedly misstated facts, mischaracterized testimony and … frustrated Mr. Skilling's honest attempts to answer their inquiries by interrupting him at least 73 times" during his Feb. 7 testimony.

Sen. Barbara Boxer, California Democrat, yesterday called on the Securities and Exchange Commission, which is pursuing a civil investigation of Enron, to take legal action against Enron executives who she said appeared to have engaged in illegal insider trading of company stock. She also urged the SEC to go to court to freeze the executives' proceeds from their stock sales while the legal case is proceeding.

SEC spokesmen couldn't be reached for comment on Mrs. Boxer's letter to agency Chairman Harvey Pitt.

Data obtained by federal prosecutors from company computers shows that Enron paid its executives huge one-time bonuses totaling $320 million as rewards for hitting stock-price targets, the New York Times reported yesterday. The stock targets, ending in 2000, were reached at the same time investigators say Enron officials were improperly inflating company profits by hundreds of millions of dollars, thereby buoying the stock price.

Some lawmakers say Mr. Skilling knew more about questionable financial transactions than he told two congressional panels recently and have asked him to clear up discrepancies between his testimony and accounts of former colleagues.

Leaders of the House Energy and Commerce Committee told Mr. Skilling in a letter on Thursday that documents obtained by the panel's investigators "appear to raise serious questions about the accuracy of your testimony."

Mr. Skilling testified that he could not recall being involved in approving transactions related to the "Raptors," fragile financial structures that kept more than $1 billion in debt off Enron's books and eventually toppled the company.

The Raptors' main assets improperly consisted of Enron's own stock, which plummeted last year.

Mr. Skilling, who defended himself combatively and sometimes lectured senators during a five-hour appearance on Tuesday, said in the CNN interview, "It's an election year. … I think the Congress is acting as judge and jury."

Mr. Skilling, who abruptly resigned in August for "personal reasons," also said he was shocked by Enron's precipitous collapse as well as by the suicide in January of Enron executive J. Clifford Baxter, whom he called "my best friend."

He said the energy-trading giant had "one of the best control systems in the world," with hundreds of lawyers and accountants on the vigil to prevent financial risk.

"It used to be kind of a joke in Enron that you couldn't go to the men's room without the accountants and the lawyers going in with you," he recalled.

Despite the controls put in place by company managers, the board of directors and its audit committee, Mr. Skilling said, "Can those controls catch everything? Of course not."

"Does a CEO of McDonald's … go and close out the cash drawers of every store every night? … You rely on the people within the company," he said.

Rep. Billy Tauzin, Louisiana Republican and the committee chairman, "remains convinced that Mr. Skilling was not candid in his statements before Congress," spokesman Ken Johnson said on Thursday.

Mr. Skilling's attorney, Bruce Hiler, said in a statement: "These questions have been repeatedly asked and answered by Mr. Skilling. It's a shame the House committee feels the need to continually release these letters in order to create a story where none exists."

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