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Ex-Enron CEO Jeff Skilling kept denying accusations against him during testimony in his trial yesterday, saying he would have called the FBI if he had ever become aware of any criminal activity at Enron. Maybe.
"I was aware of no illegal activity occurring at Enron Corp.," Skilling said."I would have called the FBI. I might have a little hesitation now about doing that," he said.
"You're a little angry at the government aren't you?" [attorney Daniel] Petrocelli asked.
"Yes," said Skilling.
During his third day of testimony, Skilling maintained that Enron was in good financial shape — at least as far as he knew — saying that former CFO Andy Fastow's LJM side deals seemed well-designed and that Fastow's Raptor hedging vehicles, which ended up costing Enron $1 billion, looked good on paper. Neither the LJMs nor the Raptors were meant to hide losses, Skilling said: "We weren't hiding losses; there were no losses to hide." As for the Raptors, Skilling said he relied on accountants who said they had thoroughly examined the scheme — as he said he did often when it came to business matters. "They were the experts," Skilling said.
Skilling also built on his assertion that he didn't retire from Enron in 2001 because he thought the company was in trouble. He said he told Lay he planned to leave the company on a Friday in August 2001; Lay spoke to some board members over the weekend and asked Skilling on Monday if he "[knew] anything they didn't." So Skilling paid a visit to accountant Richard Causey to make sure he indeed didn't know anything the board didn't; Causey assured him that was the case, so Skilling went back and told Lay that everything was fine. Both men must have been shocked when Enron collapsed shortly after Skilling resigned.
Also on Wednesday, Skilling discussed a point of testimony from David Delainey, the former CEO of Enron's retail division and its North American trading unit. Delainey, who testified for the prosecution, said Skilling hugged him when he told Skilling about cash piling up in the trading division during the West Coast energy crisis. Delainey said Skilling was excited because no one knew about the profits, which would have revealed a large amount of risk had they been made public. But Skilling said he was excited because Delainey was going to put the cash in reserves, which would have shielded the company from market volatility.
"Did you hug or kiss Mr. Delainey?" Petrocelli asked."I certainly hugged him, I may have kissed him," Skilling said. "Not a kiss-kiss, but I was happy."
"You kissed Mr. Delainey because you thought he did something good, not because he did something illegal?" Petrocelli asked.
"Yes," Skilling replied.
There was one mistake Skilling admitted to: He said he didn't mean to mislead analysts during a July 2000 conference call when he said the Enron broadband division had sold just $50 million worth of unused fiber optic cable, when it had actually sold more. Skilling has said he doesn't remember two other key mistakes: trying to sell a bunch of Enron stock around the time of his resignation and adding a penny to a quarterly earnings report overnight in 1999. He also said Delainey's testimony about moving retail division functions to the wholesale trading unit was wrong: Delainey said the move was made to hide $200 million in retail losses, but Skilling said it was an efficiency move and questioned whether the $200 million loss really existed at all.
Direct examination of Skilling is expected to continue through today, with cross-examination starting Monday morning.
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