Houston – Jeff Skilling, the former Enron chief executive whose reputation for nurturing innovations that woke up the once-sleepy energy industry shattered along with the company, awaited his chance Thursday to testify in his fraud and conspiracy trial, but it will be next week before he gets the chance.
Lawyers on both sides continued to question Enron’s former top in-house lawyer Thursday, keeping Skilling off the stand until Monday.
Skilling, 52, is expected to repeat statements he made years ago to congressional panels and the Securities and Exchange Commission during the storm of scrutiny touched off by Enron’s swift 2001 collapse: He committed no crimes, and he believed the company was strong when he abruptly resigned a few months earlier.
Prosecutors allege Skilling and his co-defendant, Enron founder Kenneth Lay, knew the company had serious financial problems when they repeatedly told investors it was healthy and growing. The government contends their optimism was intended to mask weak business ventures and earnings derived from accounting tricks that could no longer sustain Enron as it careened into bankruptcy proceedings in December 2001.
The two men counter that no fraud occurred at Enron other than that committed by a few executives who skimmed millions from secret side deals, they did nothing wrong, and a storm of bad publicity and lost market confidence sank the company.
Charges against Skilling span several years, while those against Lay focus on his actions after Skilling resigned in mid-August 2001.
Lay, who had been CEO for 15 years prior to ceding that seat to Skilling, resumed that role until he was pushed out more than a month after the bankruptcy filing.
Lay aims to testify as well, but likely won’t take the stand until mid-April.
Thursday’s testimony from Jim Derrick, Enron’s former general counsel, was a lead-in to the executive’s testimony.
Through Derrick, the defense team sought to counter prosecution testimony that Skilling failed to approve deals Enron conducted with partnerships run by former chief financial officer Andrew Fastow as required.
Derrick testified that Enron’s board approved procedures that required former chief accounting officer Richard Causey and former chief risk officer Rick Buy to review and sign off on such deals, but not Skilling.
“The test was, from the board, whether Mr. Causey and Mr. Buy had in fact reviewed and approved the transactions,” Derrick told Skilling lawyer Mark Holscher.
Fastow testified for the prosecution that all three were supposed to review those deals, some of which he said were done to help Enron manufacture earnings and hide bad investments.
Derrick also addressed a cursory investigation his former law firm, Vinson & Elkins LLC, conducted in response to accounting complaints raised by former Enron finance executive Sherron Watkins days after Skilling resigned.
