Ah, this is what we've been waiting for: Ex-Enron executive Jeff Skilling gave us a taste of what his cross-examination might be like today when he lashed out at government prosecutors, claiming they conducted a "rewriting of history" to blame Enron's downfall on him and former Chairman Ken Lay rather than the people actually responsible. "I think they have purposely not looked at facts they should have looked at if they wanted to come to a more balanced and accurate conclusion," Skilling, Enron's former CEO, said during testimony in his and Lay's trial yesterday.
Skilling was continuing to go through the 28 charges against him, refuting them one by one. Among the accusations he discussed Thursday was that he lied to boost Enron's stock price; Skilling said he thought (and still thinks) that Enron was in good shape and was on track to be profitable in 2001, the year the company imploded. Prosecutors, and a list of prosecution witnesses, pointed to shady side deals, questionable accounting procedures and losses in various Enron divisions as evidence that the company was headed for disaster, but Skilling said Enron "was a fine corporation [that] was brought to its knees, in my view, unnecessarily."
He blamed that in part on what he said were inaccuracies perpetuated by the prosecution, such as testimony from former Enron exec Kevin Hannon in which Hannon said Skilling told him, "They're on to us," referring to analysts questioning Enron's earnings in May 2001. Though Skilling said he might have said that, he explained that it was actually a joke in the style of SNL's "Mr. Bill" sketches of the 1970s. (Note to the ex-Enroners: Don't try to make a career in stand-up.)
Skilling's September 2001 attempt to sell 200,000 shares of Enron stock also came up again Thursday. Skilling said he wasn't trying to dump 20 percent of his stock days after he left Enron because he thought the company was in trouble, but rather because he was trying to diversify his portfolio. Skilling tried to sell the 200,000 shares on Sept. 16, 2001, but he couldn't do it because he needed a release from Enron saying he was no longer an executive with the company. By the next day, Sept. 17, Skilling apparently had the release and dumped 500,000 Enron shares; he then shorted shares in power producer AES Corp., which made him $15 million in three weeks. (Skilling has said he sold the stock because he was worried about the market post-Sept. 11; he maintains that he doesn't remember his initial attempt to make the sale on Sept. 6, days before the terrorist attacks.)
Skilling also testified that he "wasn't that involved" in the operations of Enron's broadband division for much of 2001, so he was only marginally aware of a monetization of projected future broadband earnings that took place early in 2001. Prosecution witnesses said it was done to hide losses, but Skilling said such moves were routine to keep the broadband division viable as it got off the ground.
Enron Task Force Director Sean Berkowitz will begin cross examining Skilling on Monday.
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