Enron CFO Finishes Testimony

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RENEE MONTAGNE, host:

Enron's former chief financial officer has finished testifying against his former bosses, Kenneth Lay and Jeffrey Skilling. Yesterday, defense attorneys tried to discredit Andrew Fastow's statements that he kept his superiors in the loop as he attempted to hide Enron's dire financial condition.

Reporter Mary Flood has been covering the trial for the Houston Chronicle and she joins us on the line. Good morning.

MARY FLOOD (Reporter, The Houston Chronicle): Good morning, Renee.

MONTAGNE: Did defense attorneys have much success poking holes in Fastow's testimony.

Ms. FLOOD: Well, they did make a really important point. Lay's and Skilling's lawyers pounded fast on how little documentation there is to corroborate his contention that there were regular illegal side deals and to corroborate his particular key conversations with Lay and Skilling. But he was a pretty good government witness.

MONTAGNE: What about the global galactic lift that Fastow said he wrote. Prosecutors say it's written proof of the scheme the company used to hide its losses. But is it really the smoking gun that they say it is?

Ms. FLOOD: I wouldn't say it's the smoking gun. That's the stuff, Renee, of much shorter open and shut murder cases. This is a potentially four-month long white-collar case. I don't think the government has the gun smoking or otherwise. Instead, they're presenting a long line of mostly cooperating witnesses who are going to slowly weave the tapestry of the government allegations.

MONTAGNE: In the end, how do you think that Fastow came off in front of the jury, scoundrel or a repentant sinner? You suggest he might be the latter.

Ms. FLOOD: Prosecutors brought out Fastow's stunning greed early on and had him figuratively on his knees. So when the defense got him, it was kind of hard for them to pull him down on his knees. And the expectations were low because he's quite the villain. And one of the really odd things that happened yesterday is that Lay's lawyers seemed to mock Fastow for his hearing impairment, often shouting at this admitted liar, and he actually evoked sympathy for the scoundrel of a witness.

MONTAGNE: So Fastow is done testifying against his former bosses, Kenneth Lay and Jeffrey Skilling. Who is next on the witness stand?

Ms. FLOOD: Well, this morning we expect to hear from an employee of Fastow's side company, LJM, and the government has indicated that this otherwise not very well known witness will offer some juicy morsel of testimony. And this week, we expect to hear from Sharon Watkins, and she is the former Enron VP who wrote a famous memo to Lay warning of impending accounting scandals.

MONTAGNE: And that juicy tidbit, do you have any suggestion of what it might be?

Ms. FLOOD: I don't know. If it's juicy, it's got to be about Mr. Lay or Mr. Skilling.

MONTAGNE: Mary Flood is a legal reporter at the Houston Chronicle. Thanks very much for joining us.

Ms. FLOOD: Thank you.

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