Taking the Stand, Skilling Denies Accounting Fraud Former Enron CEO Jeffrey Skilling begins his third day of cross-examination in the Enron fraud trial in Houston, Texas. Skilling has denied ordering employees to "cook" the corporation's earnings statements to show higher-than-actual profits. Madeleine Brand discusses the latest developments with Houston Chronicle reporter Mary Flood.
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Taking the Stand, Skilling Denies Accounting Fraud

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Taking the Stand, Skilling Denies Accounting Fraud

Taking the Stand, Skilling Denies Accounting Fraud

Taking the Stand, Skilling Denies Accounting Fraud

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  • <iframe src="https://www.npr.org/player/embed/5351169/5351170" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Former Enron CEO Jeffrey Skilling begins his third day of cross-examination in the Enron fraud trial in Houston, Texas. Skilling has denied ordering employees to "cook" the corporation's earnings statements to show higher-than-actual profits. Madeleine Brand discusses the latest developments with Houston Chronicle reporter Mary Flood.

MADELEINE BRAND, host:

From NPR News, it's DAY TO DAY.

Jeff Skilling will withstand more cross-examination today at the Enron trial in Houston. The former CEO has been combative at times with the prosecutor who's grilling him. Mary Flood of the Houston Chronicle is here. Hi, Mary.

Ms. MARY FLOOD (Reporter, Houston Chronicle): Hi, Madeleine.

BRAND: Well, the headline on your story today on the web says, 'Skilling is Testy on the Stand.' What got him so testy yesterday?

Ms. FLOOD: Well, it's interesting. We've seen sort of two Skillings in the two days he's been on the stand. The first day, prosecutor Sean Berkowitz controlled him quite a lot, keeping him to yes and no.

And the second day, perhaps purposefully, the prosecutor let Skilling go on, and what happened is that he went on and on, and at one point, the prosecutor Sean Berkowitz said, well, let's move onto a new topic. And Skilling goes, let's not move on, and starts talking while Berkowitz puts something else up on the screen.

BRAND: And what was that that he didn't want to move on from?

Ms. FLOOD: He didn't want to move on from an issue about reserves. Skilling is maintaining his innocence through all of this, even though he's forgotten some things and he sometimes gets mad. And he disagrees with the government's contention that Enron inappropriately kept back money and used it to fill holes when they wanted to fool the public about their earnings.

BRAND: And this is, this is when the prosecutor Berkowitz called the practice using it like a cookie jar, using those cash reserves like a cookie jar to make the company look more profitable.

Ms. FLOOD: Exactly and that's a term that Skilling really disagreed with.

It's interesting to watch these two because they're both Harvard guys. Skilling's got an MBA from Harvard and Sean Berkowitz has a law degree from across the Charles River and it's a fairly high level discussion.

BRAND: And was the prosecutor at all tripped up by Skilling? Because Skilling, as you say, is very bright and is very able to talk circles around most people.

Ms. FLOOD: No. No. The prosecutor's not tripped up. The person who had to do a little work was Skilling's own lawyer, Dan Petrocelli, who was popping up every once in awhile whenever Skilling started to vent steam, you would see Petrocelli pop up with some kind of an objection.

The last time when Skilling was just going on and on as Berkowitz did other things, I don't think Berkowitz objected to this because it showed the jury some of Skilling's behavior patterns, but Skilling's own attorney was jumping up and saying, your honor, there's no question on the plate.

BRAND: Well, as I understand it, Skilling's defense is, nothing illegal happened here; so, was he able to be convincing on that score yesterday?

Ms. FLOOD: Boy, you'd have to ask the jury whether they were convinced.

I think that he is maintaining his innocence about the things he remembers. He doesn't remember a couple of things that are key. Most important, he doesn't remember trying to dump 200,000 Enron shares just a couple weeks after he quit. And he did sell almost half of his shares, about 500,000, right after September 11th, again about a month after he quit, and he claims he didn't remember making the call in the meantime and he only sold them for September 11th.

The question is, does the jury buy that and do they buy him forgetting a phone call they've heard? And he's also forgotten one of the earnings changes. He says that though other witnesses said he asked them to change the earnings overnight to make them look better to Wall Street, he doesn't remember this and doesn't even think it happened.

BRAND: And prosecutors are basically saying he made those trades with insider knowledge?

Ms. FLOOD: Yes.

BRAND: Okay. And how long will Skilling be on the stand?

Ms. FLOOD: I think that Skilling will probably be on the stand most of tomorrow as well. And then, sometime next week, we'll see his co-defendant, Ken Lay.

BRAND: Thank you, Mary.

Ms. FLOOD: Thank you, Madeleine.

BRAND: Mary Flood is a reporter with the Houston Chronicle. She's covering the Enron trial.

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