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The Honolulu Advertiser

Posted on: Monday, December 24, 2001

Enron's ex-CEO facing skepticism

Bloomberg News Service

HOUSTON — Former Enron Corp. shareholders and employees say they're skeptical of former Chief Executive Officer Jeffrey Skilling's contention that he didn't know details of the investment partnerships that contributed to the company's bankruptcy.

Skilling, who resigned in August after six months as CEO, wasn't the kind who left details to others, they say.

"He cannot get rid of all the blame just by resigning or saying he didn't know," said Ogan Kose, a former Enron crude oil trader who lost his job Dec. 5, three days after Enron filed the largest Chapter 11 bankruptcy case in history. "He made some bad business decisions, but he tried to hide them."

Skilling said in an interview with the New York Times that the partnerships Houston-based Enron used to shuttle debt and assets off its balance sheet were the idea of former Chief Financial Officer Andrew Fastow.

"I didn't do anything wrong," Skilling told the paper. The deals with Fastow were set up partly "to save Enron money."

The U.S. Securities and Exchange Commission, the Justice Department and Congress are investigating Enron's collapse. Skilling and Fastow each are named as defendants in more than 40 lawsuits filed by investors and former employees who lost retirement accounts after Enron's shares plunged. The stock, which began the year at $83.13, closed Friday at 53 cents.

Skilling's contention that he didn't know about the inner workings of the partnerships helps position him to deal with either civil or criminal conspiracy claims, said David Irwin, a white-collar criminal defense lawyer in Baltimore.

"If my client were looking down the barrel of a conspiracy claim, the only viable defense would be lack of knowledge," said Irwin, a partner at Irwin Green Dexter & Murtha. "The question always is: What did he know and when did he know it?

"At best, it looks like you were out playing golf and didn't care what was going on back at the office."

Skilling made $46.3 million selling Enron shares between January 2000 and the time he resigned, according to SEC filings. To many employees, he was the public face of management, and he has borne the brunt of bad feelings from many of the more than 4,000 workers who were fired in early December.

Skilling, 48, cited personal and family reasons when he quit. Lay, who returned to the Enron CEO role after Skilling's resignation, has said he didn't hold either Skilling or Fastow responsible for the company's demise.

Sorting out who knew what may take months, experts say.