Skilling: He and Lay were ‘good team’
HOUSTON — Former Enron Corp. Chief Executive Jeffrey Skilling spoke up Wednesday for company founder Kenneth Lay in his third day on the witness stand in the pair’s fraud and conspiracy trial, saying they were a “good team” that committed no crimes.
Even though most counts pending against him and Lay allege crimes that occurred at different times before Enron crashed in scandal in December 2001, an overarching conspiracy count alleges they participated in a sprawling effort to portray Enron as strong when they knew accounting tricks hid bad news and weak ventures.
Skilling appeared confident, alternating between earnestness and occasional annoyance, and told jurors that neither he nor Lay perpetuated such a ruse.
“Did you and Ken Lay ever discuss doing something you knew to be forbidden by law?” Skilling’s lawyer, Daniel Petrocelli, asked Wednesday.
“No,” Skilling said. Later, he added, “It is completely untrue,” and “I was aware of no illegal activity occurring at Enron Corporation.”
The ex-CEO countered dramatic prosecution testimony given in February from David Delainey, once a Skilling favorite. Delainey ran Enron’s trading arm, Enron North America, until Skilling asked him to take over the company’s retail energy unit, Enron Energy Services, in February 2001. Delainey pleaded guilty to insider trading in October 2003.
Delainey told jurors he reluctantly acquiesced in a Skilling-approved plan to move the retail unit’s trading arm into the profitable Enron North America to hide $200 million in losses.
Delainey said he told Skilling in March 2001 that the move lacked integrity because losses could just be written off. Delainey told jurors that Skilling asked him, “What do you want to do?” which he took as code to go along with the move.
Skilling testified Wednesday that the move was intended to quell disputes between traders in the two divisions and gain efficiency — not to hide losses.
“So I asked Mr. Delainey, ‘Are you sure you want to do this?’ and he said yes,” Skilling said.
“Was this done to hide losses?” Petrocelli asked.
“Not in my mind,” Skilling replied.
Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy.