HOUSTON — Former Enron Corp. Chief Executive Jeffrey Skilling denied Monday he had tailored his testimony to undermine government allegations that he knew his company resorted to accounting tricks and other fraud to post impressive results.
The ex-CEO, in the 12th week of his fraud and conspiracy trial alongside Enron founder Kenneth Lay, reiterated he had nothing to hide as his cross-examination by prosecutor Sean Berkowitz began.
"I have nothing to hide, Mr. Berkowitz," Skilling said. "I don't think it's a question of tailoring your testimony. I will respond to your questions to the best of my ability."
He said his testimony was not rehearsed, though he has spent years getting ready to be his own most important witness. When asked if he has been counseled by a trial consultant on body language, communicating effectively and how to be persuasive, Skilling replied, "Communicating effectively, yes."
The ex-CEO was matter-of-fact rather than openly combative, though Berkowitz at times cut him off.
Prosecutors allege Skilling and Lay repeatedly lied to investors and employees about Enron's health, spouting false optimism that hid weak business ventures and using accounting tricks that hid debt and inflated profits.
The two defendants say no fraud occurred at Enron, and the company spiraled into bankruptcy proceedings in December 2001 because of bad publicity and lost market confidence. Enron's flameout left thousands of workers jobless and wiped out billions of dollars in investment.
On Monday, Berkowitz challenged several statements Skilling made last week during four days of initial questioning by his lead attorney, Daniel Petrocelli. Among those were Skilling's insistence that his Enron stock sales that grossed $63 million in 2000 and 2001 were proper, and his assessment of the worth of Enron's hodgepodge of international assets when he abruptly resigned from the company in mid-August 2001.
Last week, Skilling told jurors he didn't remember telling his broker to sell 200,000 of his Enron shares less than a month after he resigned. That sale was held up, and Skilling ended by selling 500,000 Enron shares on Sept. 17, 2001, which was the first day the markets opened after the Sept. 11, 2001, terrorist attacks.
Prosecutors allege he ordered the Sept. 17 sale because he knew Enron was in financial trouble, not because of markets roiled by the attacks.
On Monday Skilling acknowledged he had forgotten about trying to order the sale of 200,000 shares on Sept. 6 that year until he heard his voice on a tape recording of a call to his broker that day played for jurors.
"You just forgot about that original order, correct?" Berkowitz asked.
"That's correct, yes," Skilling replied. He said the same thing last week, though he said he remembered details about telling his broker on the call that he planned to short sell stock of another energy company.
Other insider-trading counts against him allege he knew turmoil loomed when he sold tens of millions of dollars in stock through most of 2000 even as the share price rose. Skilling said those sales were pre-programmed to diversify his holdings.
He denied Monday that he advised his ex-wife, Susan Skilling, and his then-girlfriend, Rebecca Carter — now his wife — to sell Enron shares in October and November 2000. He said he didn't know his ex-wife exercised Enron options in October that year for $14 million, and Carter sold $1.6 million in shares the next month.
"I was talking to my brothers during the (mid-morning court) break, and they said, 'You didn't tell us to sell stock,'" Skilling said in an apparent joke.
On international assets, prosecutors have repeatedly displayed a document that shows Skilling considered them overvalued on Enron's books by almost $5 billion before he resigned. He had pushed to sell those assets because they brought in paltry returns, but last week he testified that when he resigned, he advised Lay and other directors to keep them rather than sell at fire-sale prices.
That testimony appeared to bolster Lay's contention that he hid nothing when he praised those assets in the fall of 2001 rather than say they were overvalued. Lay aims to testify later this month.
Asked if the gap between those assets' booked values and what they would bring if sold was a problem — when Skilling has insisted he knew of no problems when he resigned — the ex-CEO sought to minimize the point.
"There is no company in the United States of America where if they wanted to sell their assets today, they would receive book value," Skilling replied.
Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy. Lay confirmed repeatedly last week he aims to testify later in the trial.