honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Thursday, April 6, 2006

Enron ex-CEO expected to testify

By GREG FARRELL
USA Today

HOUSTON In what could prove to be the decisive juncture in the government's trial of the two men accused of perpetrating a giant fraud at Enron, former CEO Jeff Skilling is expected to take the stand in federal court here today to testify on his own behalf.

The 52-year-old defendant, who said yesterday that he's been "waiting four years for this," will likely tell jurors what he told congressional investigators in 2002, that up until the moment he decided to step down from his job in August 2001, Enron was a solid, profitable company, not the fly-by-night operation its detractors claimed it was.

The stakes couldn't be higher. Prosecutors from the Enron Task Force have accused Skilling and Enron founder Ken Lay of conspiring to hide the company's true financial condition from investors and analysts. In fall 2001, after revelations that former Enron chief financial officer Andrew Fastow made millions of dollars in illicit profits from transactions between the company and a series of private partnerships he controlled, the company's stock price tanked, and Enron eventually filed for bankruptcy court protection.

Skilling and Lay blame Enron's collapse on a loss of confidence in the marketplace after Fastow's crimes became public. During his testimony last month, Fastow admitted to numerous instances of lying and stealing. But once Skilling takes the stand, the jury's verdict in the case could hinge solely on whether the former CEO proves credible.

"If you don't take the stand, the question for the jury is, 'Is there a reasonable doubt in the government's case?' " says John Coffee, an expert in securities law at Columbia University. "Once you take the stand, the question becomes: Does the jury believe this man or not? If I think this person is disingenuous, I probably won't worry about any problems with the prosecution's case."

During the first 10 weeks of the trial, jurors have learned that Skilling was known for his brilliant, analytical mind as well as his volatile temper. Skilling's lead attorney, Dan Petrocelli, is expected to showcase the first skill. The true test of Skilling's credibility on the stand will take place late next week, when the government cross-examines him and tries to get him to flash some of his famous temper.