Key Enron witness reverses himself
HOUSTON — In testimony that could damage the prosecution’s case against five former Enron Corp. broadband executives, a key government witness admitted Monday he was wrong when he testified last week that market analysts saw a damning videotape as part of an Enron presentation in 2000.
Prosecutors last week showed jurors what they said was a videotape of an Enron presentation to analysts in January 2000. In that video, a segment showing Enron executive Rex Shelby discussing capabilities of Enron’s broadband network as if it were up and running — when it wasn’t — abruptly appears between segments of former Enron CEO Jeffrey Skilling discussing the operating system with analysts in the future tense.
Defense attorney Tony Canales revealed through cross-examination of prosecution witness Kenneth Rice that the analysts who influence stock price never saw the Shelby segment, and on Monday, Rice acknowledged the discrepancy.
“My conclusion from that would be that it wasn’t shown,” Rice, the former CEO of the broadband unit, said after watching unedited footage of the conference shown next to an edited version that included the key segment. Jurors saw the edited version last week; they saw both versions Monday.
Rice was indicted along with the five defendants two years ago on charges of lying to Wall Street about Enron’s broadband network’s capabilities in order to inflate stock prices.
Rice pleaded guilty last year to securities fraud and is cooperating with the government.
In his seventh day on the witness stand Monday, Rice said prosecutors told him the edited version of the videotape they supplied him “came from Enron and was of the analyst conference.”
The conference featured glowing presentations of Enron’s trading and retail energy businesses, and within two days company shares jumped from $54 to $72.
Rice testified twice last week that analysts saw the segment on the edited version of the video.
Later Monday, prosecutor Ben Campbell questioned whether Shelby’s description of the operating system as up and running was accurate.
“No,” Rice replied.