Skilling Continues to Assert Innocence at Enron Trial

Enron CEO Jeffrey Skilling takes the stand for a second day of cross examination. Skilling tells the court that he was innocent when accused of using accounting tricks to hide the company's poor performance.

Copyright © 2006 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, host:

In Houston, former Enron CEO Jeffrey Skilling took the stand for his second day of cross-examination. Skilling was aggressive in asserting his and Enron's innocence, which he did repeatedly. As NPR's Wade Goodwyn reports, the prosecutor's questions focused on the alleged accounting tricks the company used to create its financial reports.

WADE GOODWYN reporting:

The substance of Assistant U.S. Attorney Sean Berkowitz's line of questioning yesterday was about Enron's accounting devices, with names like LJM and Raptor. But underneath, Berkowitz was trying to paint a much broader picture of Enron's corporate culture. And throughout the day, Berkowitz and Jeff Skilling struggled mightily with each other to see who was going to control the paintbrush, and which landscape the jury was going to see. Berkowitz drew a portrait of a company where meeting the quarterly earnings targets was everything--a place where the pressure to meet those forecasts drove Enron's managers to making ruinous deals at the last hour, so they could put better-looking numbers in the books.

Berkowitz repeatedly used the company's internal documents against Skilling. A year before the company went bankrupt, it was becoming clearer that Enron's culture had become on issue. I will stipulate to that, I will stipulate to that, Skilling said, throwing his palms outward toward Berkowitz to stop the assault. But Berkowitz pressed on, detailing the bad deals that resulted from that environment. The prosecutor then connected the dots for the jury, and in order to hide these under-performing assets, you put them into the Raptor vehicles, isn't that correct Mr. Skilling? That is not correct, that is not correct, Skilling replied, angrily. And it went like that throughout the day, a jockeying for control between Berkowitz and Skilling. The former chief executive often refused to give yes or no answers, and would try to elaborate. Berkowitz would then interrupt him, in order that he answer his question yes or no, prompting Skilling to boil over with frustration.

But you're misrepresenting it. Skilling repeatedly refused to acknowledge that Enron was using the Raptors to hide its failures. That's not true at all, Skilling said. But their value went down as anticipated, Berkowitz said, pointing to the evidence he'd put up on a big, white screen. Hindsight's a wonderful thing, Skilling snapped. When Berkowitz accused Skilling of using Enron's reserve accounts as a financial cookie jar to fabricate the company's earnings, Skilling told the prosecutor that he didn't understand the financial documents he was trying to characterize. Let's move on, Berkowitz said, sensing he might not be on solid ground. No, let's not move on, let's talk about the financial documents, Skilling replied with confidence. But Berkowitz was quick to turn Skilling's apparent advantage on its head. Mr. Skilling, I know it's difficult for you to sit here and answer questions, Berkowitz replied. And I know at times you overreact to people who are critical. But if you could just let me ask the questions, we'll move along. Act three of the cross examination of Jeffrey Skilling begins today.

Wade Goodwyn, NPR News, Houston.

Copyright © 2006 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.