Enron Trial: Jeffrey Skilling on the Stand
SCOTT SIMON, Host:
Jeffrey Skilling took the stand this week. Enron's former chief executive is fighting 28 counts of fraud, conspiracy and insider trading. He was questioned this week by his lawyer, Dan Petrocelli. The prosecution begins cross examination on Monday. Our friend from the business world, Joe Nocera, New York Times columnist, has been covering Enron for many years and he spent the week in Houston at the trial. He joins us from New York. Joe, thanks for being with us.
JOE NOCERA: Thanks for having me, Scott.
SIMON: As we mentioned, you've been covering Enron a long time. What was your estimation of the case that Mr. Skilling is trying to present in his own defense?
NOCERA: Well, he's got a pretty tough case to make. I mean he's not only saying that he didn't see any fraud, and therefore he's not guilty of fraud, he's saying there wasn't any fraud. I mean his fundamental case is that Enron was brought down by, in effect, the Wall Street hysteria. You know, everything that we've written about and everything we know about it, which is that it was a company that was rooted in fraud and fraud was the way it made its earnings quarter after quarter after quarter and that, you know, basically the top ranks of the company were all in on it, he basically says, Nuh-uh, didn't happen.
SIMON: For that argument to be accepted, what has to fall into place? What does he have to convince the jury of?
NOCERA: He has to convince a jury that these, these series of transactions that took place quarter after quarter were not only out of the norm, but they were, you know, a legitimate way to make money. And they were, time and time again during this trial, when he was on the stand, he would take some example and say, well, you know, we just monetized this by doing X, Y and Z, and it'll be something really complicated, and you know, if you know about business, you know, you know, the notion of monetizing a business that doesn't make any money doesn't make any sense. But he would say it in this tone of voice of, well, of course, that's what, this is what business is, this is what business does.
SIMON: Do you think it's possible that Jeffrey Skilling actually believes this is the way business works?
NOCERA: I do think he believed this is how business works. I think one of the things that I came away with from watching him on the stand was he should never have been at the head of Enron. He's a consultant. He thinks like consultant. He really doesn't understand the innards of business and the sort of importance of operations, of cash earned the old fashion way. He just has this view that, you know, you do a little transaction here, a deal there, you make your earnings what they want to be and everything's hunky dory. And it, I think he believes it and I think its proof that he was the wrong person to be running Enron.
SIMON: He showed some flashes of anger or righteous indignation.
NOCERA: Boy, did he ever. He has a great lawyer. And Mr. Petrocelli would immediately paper over it or damp it down or kind of try to use it to advantage, but here's what I wind up thinking as I was listening to that. He would have these little meltdowns every afternoon and when he got tired, you know, here's a guy fighting for his life and there's nothing more important than to be disciplined on the stand. He would just kind of, every once in awhile just kind of fly off the hook, make a crack about the FBI or say something snarky about one of the people who had testified against him. And you know, you just think to yourself, boy, what's going to happen when the prosecution gets their hand on him? It's not going to be hard to goad him into having, you know, like explosions on the stand. That's what I think.
SIMON: What do you see as his maximum areas of legal exposure on these 28 counts?
NOCERA: The other thing is that there are so many transactions that he says were legitimate or he has an alternative version of reality for, you just think to yourself, well, the prosecution doesn't have to nail them on all of them. They just need to get them on two or three. So his ability to hold his story whole as they take him through this and this and this and what about this, that's really going to be hard for him.
SIMON: Joe Nocera of the New York Times speaking from New York. Thanks very much.
NOCERA: Thanks a lot, Scott.
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