Former Enron chief executive testifies
By MARCY GORDON
Associated Press

WASHINGTON — Former Enron chief executive Jeffrey Skilling told senators Tuesday “I didn’t lie to Congress or anyone else” in denying he was aware of the company’s precarious finances or its use of complex partnerships to hide debt.

Addressing skeptical lawmakers, Skilling also said, “I never duped Ken Lay,” disputing previous statements by Sherron Watkins, a company vice president who said Skilling had manipulated Enron’s former chairman.

“I heard Ms. Watkins testify as to her opinion,” Skilling said. “I have no idea what the basis was for this opinion.”

Watkins, who appeared with Skilling, was more critical of Lay’s role than she had been in her Feb. 14 testimony to another congressional panel. She told the Senate Commerce Committee on Tuesday she was “incredibly frustrated” with Lay’s inaction after she warned him in August of potentially serious accounting problems involving the partnerships.

“I believe that Enron had a brief window to salvage itself this past fall and we missed that opportunity because of Mr. Lay’s failure to recognize or accept that the company had manipulated its financial statements,” Watkins said.

Skilling became more self-assured, and almost cocky, as the hearing went on, at one point wagging his finger at Sen. Ron Wyden, D-Ore., and telling him “back up, back up,” in reading a document, and lecturing senators about the complex financial instruments called derivatives.

Skilling repeatedly said, “I’m not an accountant” when asked about Watkins’ warnings to Lay.

Watkins testified she was afraid to take her concerns to Skilling because he might fire her. She said she finds it “hard to believe that Mr. Skilling was not aware that something was amiss.”

Jeffrey McMahon, Enron’s current president and chief operating officer, told the senators that Watkins’ warnings “were concerning to me and I encouraged her, as others did, to see Mr. Lay about it.”

Sen. Byron Dorgan, D-N.D., whose Commerce subcommittee is investigating Enron’s collapse, told Skilling that some of his statements were “unbelievable.”

He asked Skilling about the $66 million in Enron stock he sold between February 1999 and June 2001, contrasting it with the retirement savings of Enron employees that were wiped out as the stock plunged last fall. The employees’ and retirees’ 401(k) accounts were loaded with Enron stock.

“You still have most of your $66 million; that family’s life savings is wiped out,” Dorgan told Skilling, referring to a family in North Dakota that told him it lost nearly all its $330,000.

Watkins said she believed that former chief financial officer Andrew Fastow “would not have put his hands in the Enron cookie jar” without Skilling’s approval. Fastow personally made more than $30 million from running the partnerships.

Skilling said, “I relied on our accountants,” when asked about Watkins’ warnings that Enron stock was improperly being used as the foundation of the web of partnerships that eventually brought the company down.

“I have nothing to hide,” Skilling said, explaining why he had decided to testify rather than take the Fifth Amendment like “other innocents” called before congressional committees.

credits

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