Houston – Enron Corp.’s former investor-relations chief was challenged Tuesday about testimony that suggested former CEO Jeffrey Skilling participated in schemes to hike earnings estimates or minimize how much revenue stemmed from asset sales.
In his fourth day of testimony in the fraud and conspiracy trial of Skilling and Enron founder Kenneth Lay, Mark Koenig reiterated his belief that top executives bent on meeting Wall Street earnings expectations made or knew of overnight changes to estimates that he considered suspect.
He also reiterated that Skilling told analysts that sales of inoperative fiber-optic cable accounted for $50 million in second- quarter 2000 revenue for a broadband unit when an internal company document distributed later said the sales accounted for three times that much.
When Koenig first made those statements during testimony for the prosecution, he stopped short of saying Skilling or Lay ordered any fudging of Enron’s numbers or that Skilling knowingly minimized fiber-sales revenue.
Skilling lawyer Daniel Petrocelli demanded specifics.
Koenig said he informed Skilling and former top accountant Richard Causey, on the day before Enron was to announce fourth- quarter 1999 earnings, that analysts had kicked expectations to 31 cents per share from 30 cents. Drafts of earnings press releases showed Enron was to announce earnings of 30 cents per share.
He said Causey told him that he would “work on it,” and “a decision was made to increase the earnings.”
