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The Honolulu Advertiser
Posted on: Tuesday, April 11, 2006

Enron's ex-CEO says he's innocent

By Carrie Johnson
Washington Post

Jeffrey Skilling

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HOUSTON Jeffrey Skilling, the brash, self-made executive who powered Enron Corp. to international acclaim only to watch it descend into bankruptcy protection and notoriety, took the witness stand yesterday in his fraud trial to declare himself "absolutely innocent."

Skilling, 52, admitted he was emotional, even nervous, as he stepped forward to take an oath to tell the truth during the 11th week of the trial. "I guess in some way my life is on the line."

Defending himself against charges that he lied to the public about Enron's health and bailed out when he knew the company was failing, the former chief executive took jurors on what he described as his own emotional journey, from the excitement of building one of the nation's most powerful companies to what he called his exhaustion and distress at the toll his commitment to Enron had taken on his family. Later, Enron's collapse led to drinking and depression, he told the jurors.

Skilling, who was paid $152 million from 1999 to his departure in 2001, said he had worked tirelessly over a decade to transform Enron from a stodgy pipeline company into a business that traded energy. Proclaiming the firm "the finest company in the world," Skilling told the jury "there was excitement, there was electricity" back in the days when he strode through the doors of the glass tower that once dominated Houston.

But by 2000, the long work days had turned into something that was "emotionally exhausting," Skilling said. "Some people would say I was obsessed by Enron. ... I had not spent the time I should have spent in my family."

He returned from a three-week African safari with the realization that he no longer wanted to lead the company. He broached the idea with Enron founder and then-chairman Kenneth Lay, his charismatic fellow defendant who will testify later in the trial.

"I said, 'I really hate this job,' " Skilling recounted, looking at Lay at the defense table, with Lay watching him. "And I think Ken said, 'Oh no, not again.' " The departure was averted.

Months later, in 2001, on what he called "that fateful day, Friday the 13th of July," Skilling's desire to leave returned in force. He said he drafted a resignation letter and talked with his son, asking, "Would you still respect me if I do that?" As Skilling described the moment from the witness stand, his wife, Rebecca Carter, a former secretary to Enron's board, looked over at her stepson with tear-filled eyes.

The story Skilling told the jury yesterday is counter to the prosecution's contention that he saw Enron on the verge of collapse and decided to get out while he could, rushing to sell his stock before what he knew became public.

"The charges against me are wrong," Skilling continued, as jurors craned forward to hear him. "I am innocent of those charges. I will fight those charges until the day I die."

He broke down on the witness stand when asked about Enron workers, many of whom lost their personal investments and pensions, saying the company's demise left him feeling like "you wanted to die." He made reference to days when he could not get out of bed, and to episodes of heavy drinking in late 2001.

If convicted of all 28 counts against him, Skilling faces up to 275 years in prison and tens of millions of dollars in fines though an actual prison term would likely exceed two decades. Lay faces a maximum of 45 years in prison if convicted of the counts against him.

Under questions from his attorney Daniel Petrocelli, Skilling's voice grew stronger and he gestured toward the jury as the day went on, spending more than an hour describing technical aspects of the business. But he only briefly addressed two issues that are likely to be the focus of what is expected to be a blistering, multiday cross-examination: his stock sales in 2001 and his contention that Enron was fiscally sound just months before it collapsed into bankruptcy protection.

Skilling said he suspended a plan to sell personal shares of Enron stock in June 2001 because he thought the stock price had dipped "too low." As for his attempt to sell 200,000 shares of Enron stock Sept. 6, 2001, Skilling said he could not remember the event, despite the fact that prosecutors had presented the jury with tapes of the call and testimony from his then broker at Charles Schwab.

"I guess that transcript, I just don't remember that," Skilling said yesterday.