HOUSTON — A former high-ranking Enron Corp. trading and retail energy executive delivered the most bruising punches so far to company founder Kenneth Lay and former Chief Executive Jeffrey Skilling yesterday in the fifth week of their fraud and conspiracy trial, saying it was standard to "play fast and loose with our rules" when it came to earnings manipulation.

David Delainey, who impressed his superiors enough to be chosen to run the profitable wholesale trading franchise until early 2001 when he took the helm of a highly touted retail energy unit, Enron Energy Services, told jurors he reluctantly acquiesced to a Skilling-approved plan to move the retail unit's trading arm into the larger trading franchise to hide $200 million in losses.

He also said Enron wrongly dipped into reserves to meet and beat earnings targets under pressure from Skilling.

"It was standard operating procedure," Delainey said. "At Enron in Houston, we tended to be pretty fast and loose with our rules."

Delainey said he discussed folding the retail unit into the wholesale division's larger trading operation with Skilling, former Enron Chief Accounting Officer Richard Causey and others at a late March 2001 meeting in Skilling's office. He said he told his superiors the move "lacked integrity" because it was intended to hide first-quarter losses that Enron could write off.

An angry Causey asked, "Isn't this a bona fide operational change?" Delainey recalled. Then Skilling looked at Delainey and said, "What do you want to do?"

"What did you take that to mean?" prosecutor Kathryn Ruemmler said of Skilling's question.

"Get in line," Delainey replied. "It was, 'Hey, we've come up with a solution, let's move forward.' " He did not say explicitly he took Skilling's question as an order to break the law.

When Enron released first-quarter earnings in April 2001, Skilling told Wall Street analysts who influence stock prices the decision to move retail trading into the wholesale division was driven by the smaller unit's "explosive growth," and the combination of like functions would be more efficient.

Delainey told jurors yesterday the real motive for the move was "to find a solution to the $200 million problem."

After Skilling abruptly resigned from Enron in mid-August 2001, Lay, who resumed the CEO role, also told analysts and Enron employees the retail unit was strong and would keep growing. By then it had lost up to $400 million, Delainey said.

Enron, which crumbled into bankruptcy proceedings in December 2001, had four core business units: Enron Wholesale Services, which included trading unit Enron North America as well as global assets; Enron Energy Services, a retail energy unit that packaged energy services for mostly industrial companies; Enron Broadband Services; and Transportation and Distribution, which included natural gas pipelines and Portland General Electric, an Oregon utility.

Before Delainey, 40, ran EES, he was chief executive of Enron North America. He said top executives often called upon the profitable trading operation to fill earnings gaps left by other divisions that missed their targets.

He said he felt pressure from Skilling and Causey to raid reserves derived from ENA's extra profit to boost earnings at other units, but did not say either man directly told him to break the law.

Delainey, of Calgary, Canada, said the trading unit was "making tons of money, knocking the cover off the ball" in 2000 as it took advantage of California's power crisis in 2000 and 2001 and hauled in millions of dollars, even in a single day.