Skilling's precise words not recalled

Intent was improper, federal witness says

March 24, 2006|By BLOOMBERG NEWS

HOUSTON -- Former Enron Corp. Treasurer Ben F. Glisan Jr., under questioning by a defense lawyer, hedged his earlier testimony that one-time chief executive Jeffrey K. Skilling approved a scheme to dodge accounting rules.

Glisan, 40, told jurors at Skilling's fraud trial Wednesday that the former CEO endorsed use of off-the-books partnerships to "circumvent the accounting rules."

But under cross-examination yesterday by Skilling lawyer Daniel M. Petrocelli, Glisan said he couldn't recall Skilling's exact words.

"I don't know that he used the word `circumvent,' " Glisan said in federal court in Houston about the May 2000 conversation. "The only reason to do it was for an accounting benefit, not an economic benefit. That in itself was improper."

Skilling, 52, is on trial with former Enron Chairman Kenneth L. Lay, 63. The two face at least 25 years in prison if convicted on charges that they conspired to defraud investors and enrich themselves by keeping Enron stock prices inflated.

Prosecutors claim Enron management used off-the-books partnerships devised by former finance chief Andrew S. Fastow and Glisan to manipulate earnings.

Glisan testified that he had two one-on-one meetings in the spring of 2000 at which he described an off-the books partnership known as Raptor with Skilling.

Glisan also said he couldn't be sure Skilling knew that Glisan and other Enron insiders were using off-the-books partnerships to steal from the company.

Glisan testified Wednesday that he made $1 million on a $5,826 investment in one of the partnerships. He testified yesterday that Fastow, his former boss, told him Skilling knew insiders were taking money.

Glisan, 40, was the first witness in the eight-week-long trial to indicate that Skilling approved the publication of deceptive financial statements. He also said Lay knew of Enron's financial woes in late 2001, but was telling the public the company was strong.

Glisan, 2 1/2 years into a five-year sentence for securities fraud in a federal prison near Houston, is testifying under an immunity agreement with prosecutors. In 2003, he admitted falsifying Enron's reported financial results to make the company look more successful than it was.

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