- The Washington Times - Monday, April 17, 2006

HOUSTON (AP) — Former Enron Chief Executive Jeffrey Skilling denied yesterday that he had tailored his testimony to undermine government accusations that he knew his company resorted to accounting tricks and other fraud to post impressive results.

Mr. Skilling, in the 12th week of his fraud and conspiracy trial alongside Enron founder Kenneth Lay, reiterated that he had nothing to hide as his cross-examination by prosecutor Sean Berkowitz began.

“I have nothing to hide, Mr. Berkowitz,” Mr. Skilling said. “I don’t think it’s a question of tailoring your testimony. I will respond to your questions to the best of my ability.”

He said his testimony was not rehearsed, although he has spent years getting ready to be his own most important witness. When asked whether he has been counseled by a trial consultant on body language, communicating effectively and how to be persuasive, Mr. Skilling replied, “Communicating effectively, yes.”

Mr. Skilling was matter-of-fact rather than openly combative, although Mr. Berkowitz at times cut him off.

Prosecutors say Mr. Skilling and Mr. Lay repeatedly lied to investors and employees about Enron’s health, spouting false optimism that hid weak business ventures and using accounting tricks that hid debt and inflated profits.

The two defendants say no fraud occurred at Enron, and the company spiraled into bankruptcy proceedings in December 2001 because of bad publicity and lost market confidence. Enron’s flameout left thousands of workers jobless and wiped out billions of dollars in investments.

Yesterday, Mr. Berkowitz challenged several statements Mr. Skilling made last week during four days of initial questioning by his lead attorney, Daniel Petrocelli. Among those were Mr. Skilling’s insistence that his Enron stock sales that grossed $63 million in 2000 and 2001 and his assessment of the worth of Enron’s hodgepodge of international assets when he abruptly resigned from the company in mid-August 2001 were proper.

Last week, Mr. Skilling told jurors that he didn’t remember telling his broker to sell 200,000 of his Enron shares less than a month after he resigned. That sale was held up, and Mr. Skilling ended by selling 500,000 Enron shares on Sept. 17, 2001, which was the first day the markets opened after the September 11, 2001, terrorist attacks.

Prosecutors say he ordered the Sept. 17 sale because he knew Enron was in financial trouble, not because of markets roiled by the attacks.

Mr. Skilling acknowledged yesterday that he had forgotten about trying to order the sale of 200,000 shares on Sept. 6 that year until he heard his voice on a tape recording of a call to his broker that day, which was played for jurors.

Other insider-trading counts against him accuse him of knowing that turmoil loomed when he sold tens of millions of dollars in stock through most of 2000 even as the share price rose. Mr. Skilling said those sales were preprogrammed to diversify his holdings.

He denied yesterday that he advised his ex-wife, Susan Skilling, and his then-girlfriend, Rebecca Carter — now his wife — to sell Enron shares in October and November 2000. He said he didn’t know that his ex-wife exercised Enron options in October that year for $14 million. Miss Carter sold $1.6 million in shares the next month.

On international assets, prosecutors have repeatedly displayed a document that shows Mr. Skilling considered them overvalued on Enron’s books by almost $5 billion before he resigned. He had pushed to sell those assets because they brought in paltry returns, but last week he testified that when he resigned, he advised Mr. Lay and other directors to keep them rather than sell at fire-sale prices.

That testimony appeared to bolster Mr. Lay’s contention that he hid nothing when he praised those assets in the fall of 2001 rather than say they were overvalued. Mr. Lay aims to testify later this month.



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