Prosecutor Sean Berkowitz abruptly ended cross-examination of former Enron CEO Jeff Skilling yesterday after asking Skilling whether he didn't leave Enron in August 2001 because he wanted to become CEO of Lucent Technologies. Skilling has given several reasons for leaving the company, mainly related to Enron burnout and wanting to spend more time with his family, but prosecutors claim he resigned because he knew Enron was headed for collapse.
On Wedensday, Berkowitz discussed a time Skilling met a friend, Dick Foster, for drinks in New York in 2001 and talked about how a headhunter had approached him about the Lucent job. Skilling said he was flattered, but didn't want to take on another major commitment after leaving Enron, but Berkowitz claimed Skilling told Foster he was interested in the Lucent job. "Didn't he say, 'Jeff, I thought this was all about your family?'" Berkowitz asked. Skilling denied that Foster asked that question and Berkowitz unexpectedly turned him over to attorney Daniel Petrocelli for redirect. Petrocelli had to jump out of his chair, but he immediately picked up the Lucent questioning: Skilling said he told Foster that he wanted to return to Enron and help pull the company out of its death spiral, and he said that led to a falling-out between the two. "We haven't spoken since," Skilling said.
Petrocelli questioned Skilling about his involvement with Photofete, an online photo-sharing company run by a former girlfriend in which he invested. Berkowitz had asked Skilling about Photofete on Monday, forcing Skilling to admit that he invested $180,000 in the company and that it did $450,000 worth of work for Enron — far more than the $3,000 in business Skilling told the SEC that Enron did with Photofete. Under questioning from Petrocelli, Skilling said he had "completely forgotten about [the deal]," adding that he and Photofete founder Jennifer Binder "only went out a couple of times." He said he had nothing to do with the $450,000 contract Binder had with Enron.
Skilling also denied charges of insider trading, saying he did not work to pump up the price of Enron stock, then dump it in a sale. "My characterization would be dump and pump," Skilling said. He also said he didn't tip off his ex-wife and his girlfriend (who is now his wife) that they should sell Enron stock when the company was in trouble. Berkowitz had suggested that the fact that Skilling, his former wife and his girlfriend sold millions of dollars' worth of Enron stock at the same time in the fall of 2000 was planned, but Skilling said it was just a coincidence.
In other testimony under Petrocelli's questioning, Skilling reiterated that former CFO Andy Fastow's LJM partnerships were legitimate business operations and that he didn't know Fastow was stealing from the company.
Petrocelli should wrap up his redirect this morning, after which Skilling will face a brief line of questioning from Berkowitz. Afterward, the defense said it plans to move quickly through several witnesses who will testify on Skilling's behalf. Former Enron Chairman Ken Lay could take the stand early next week.
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