Skilling: Enron, As He Saw It
Former Enron Corp. Chief Executive Jeffrey Skilling once envisioned himself as a professor during life after Enron. On Monday, he started giving the most important lecture of his life from the witness stand in his fraud and conspiracy trial.
He told jurors who will decide whether he is a liar and crook that in August 2001 he left the company he took credit for building over 11 years because he was burned out and troubled about its falling stock price. He insisted he did not know the company was bound for one of the most scandalous business failures in history less than four months later.
"Not in my wildest dreams, no. It's almost inconceivable now what happened," the ex-CEO said when his lead lawyer, Daniel Petrocelli, asked if he had any clue what was on Enron's horizon when he walked away.
Skilling accused Congress of conducting a witch hunt in highly charged hearings in early 2002 - at which he was among the few ex-Enron executives who testified - and insisted he believed Enron was strong when he abruptly resigned.
"I am absolutely innocent," Skilling told jurors. He said he would fight the government's charges "until the day I die," and provided a glimpse of what's at stake:
"I guess in some ways my life is on the line, so I'm a little nervous," he said.
Skilling's testimony is among the most highly anticipated in the trial - equal only to that of his co-defendant, Enron founder Kenneth Lay, who is expected to testify later this month. Skilling is expected to be on the stand all week.
Lay and Skilling are accused of repeatedly lying to investors and employees about Enron's financial health when they allegedly knew fraudulent accounting propped up a facade of success. Enron careened into bankruptcy in December 2001, six weeks after announcing unprecedented losses and a massive equity writedown that generated intense scrutiny from once-adoring Wall Street and regulators.
The two men say there was no fraud at Enron other than that committed by former Chief Financial Officer Andrew Fastow and a few others, who skimmed millions from secret schemes, and that bad publicity coupled with lost market confidence sank the company.
Skilling appeared earnest, alert and conversational with none of the swaggering bravado for which he was known when he ran Enron. He grew more animated when he fell into a teacher mode, leading jurors through a mini-seminar on Enron's transformation from a staid pipeline company to an energy giant that created gas and electricity markets as well as other businesses.
CBS News Legal Analyst Andrew Cohen says Skilling spent a great deal of time Monday explaining to jurors why Enron was in solid financial shape during his long tenure there.
"He justified many of the daring corporate decisions the company made; decisions which long ago have been questioned, even ridiculed, by experts who don't have a dog in this fight," says Cohen.
"If you didn't know the company filed for bankruptcy four and half years ago, and has since been revealed to be in a mess, you would swear at times that Skilling, in describing Enron, was talking about a solvent, successful Fortune 500 company. But he's not. And no amount of salesmanship can change that."
The ex-CEO has yet to address the multitude of allegations made against him by government witnesses.
Petrocelli whipped a string of questions aimed at ridiculing the government's contention that his client is a crook. The attorney asked Skilling if he ever destroyed documents or computers, set up offshore accounts to hide money, or did anything to hide past behavior or dealings. Each time, Skilling said, "No," sometimes accentuating his answer by leaning forward.
"Did you leave town?" Petrocelli asked.
"I went to Fredericksburg," Skilling replied, eliciting courtroom laughter at his referral to a small town a few hours' drive away.
Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy.
If convicted of all counts, Skilling faces a maximum of 275 years in prison and tens of millions of dollars in fines. But an actual prison sentence would likely only be 20 years or more. Lay faces a maximum of 45 years in prison if convicted of the six counts against him.
Jurors took notes and listened intently to Skilling. His first wife, Susan Skilling, and their daughter and two sons, aged 22, 19 and 15 - watched his testimony, flanked by Skilling's second wife, former Enron corporate secretary Rebecca Carter.
Monday, the ex-CEO said Enron consumed his life after he joined the energy company in 1990 to carry out his vision of applying banking principles to the deregulated natural gas industry. Other ventures followed, including retail energy and broadband divisions that crumbled alongside the parent despite billions poured into them.
But he said by the summer of 2001, he thought Enron was in good hands, and it was time to go. He also was bothered by falling stock, which he took as a sign that Wall Street had lost confidence in him.
"I guess you could say I was obsessed with Enron," he said. "Every day was intense, and I had not spent the time I should have spent with my family."
He took a rafting trip with his youngest son, considered a university teaching job, and founded a private investment company.
But he tried to return to help save the company when a storm of scrutiny erupted upon Enron's third-quarter earnings announcement and scrutiny of partnerships Fastow ran to conduct deals with Enron.
"By coming back, I would send a strong signal to the marketplace that I didn't think anything was wrong," Skilling said, contradicting his earlier statement that his credibility with Wall Street had waned. Lay rejected his offer.
He aborted an effort to get ex-Enron executives to put up millions to help re-ignite investor confidence in Enron, when one of the contributors backed out.
"I was devastated because there's nothing harder," he said. "This had been my life. I was very proud of what we had built, so it was devastating to be so powerless, to not be able to do anything."