Houston – The testimony of Kenneth Rice – a self-described “Enron guy” and a member of the company’s inner circle – walked jurors into corporate headquarters and private conversations he said he had with former chief executive Jeff Skilling.
Through two days of cross-examination in the fraud trial of Skilling and former Enron chairman Ken Lay, the prosecution witness held firm in his central allegations – pointing to e-mails and calendar entries to support his many claims of meetings in which he warned the former chief executive that Enron’s Internet broadband unit had failed to attract customers and cash.
Rice also explained why executives might have touted the high- speed Internet unit in the face of mounting problems: a corporate obsession with building the company, increasing the stock price and making up for what he said Skilling called “nada” – no growth in the debt-laden international division.
“Mr. Skilling and I had misled investors on a number of occasions about the prospects for our business,” Rice testified.
Rice had little to say about the activities of Lay, who like Skilling faces fraud and conspiracy charges that could lead him to spend the rest of his life in prison.
In a point that defense lawyers are likely to highlight for the jury at the close of the case, Rice did not say Skilling directly ordered him to lie to analysts or investors. Nor did he provide any examples of one-on- one conversations in which Skilling explicitly discussed earnings manipulation using terms such as “fraud.”
But Rice told jurors that Skilling directed him to put an overly positive spin on a presentation to Enron board members in May 2001, though he could not point to documents to back up his account.
