WASHINGTON – Former Enron chief executive Jeffrey Skilling, appearing at a second congressional hearing Tuesday, insisted to Congress that he "didn't lie to Congress or anyone else" in denying he was aware of the company's precarious finances.
In a five-hour testimony before the Senate Commerce Committee, Skilling also said, "I never duped Ken Lay," disputing previous statements by Enron whistle-blower Sherron Watkins who said Skilling had manipulated Enron's former chairman.
Lawmakers brought Skilling, company vice president Watkins and Jeffrey McMahon, Enron's current president and chief operating officer, together at to ask them similar questions and then compare their answers.
Skilling acknowledged that Enron's bankruptcy has been devastating to its employees, but denied allegations by Watkins that he had duped Lay.
"I heard Ms. Watkins testify as to her opinion," Skilling said. "I have no idea what the basis was for this opinion."
Watkins, who sat at the same witness table with Skilling, separated from him by Skilling's attorney, was more critical of Lay's role than she had been in her Feb. 14 testimony to another congressional panel. She told the Senate committee Tuesday she was "incredibly frustrated" with Lay's inaction after she warned him in August of potentially serious accounting problems involving the partnerships.
"I believe that Enron had a brief window to salvage itself this past fall, and we missed that opportunity because of Mr. Lay's failure to recognize or accept that the company had manipulated its financial statements," Watkins said.
Skilling, Watkins and McMahon testified, separately and under oath, this month before a House investigative panel. Other top Enron executives, including Lay, have invoked their Fifth Amendment rights against self-incrimination and refused to testify.
Skilling became more self-assured, almost cocky, as the hearing went on. At one point he wagged a finger at Sen. Ron Wyden, D-Ore., and told him to "back up, back up," as the senator read a document. Skilling at times lectured senators about the complex financial instruments called derivatives.
"If I were in charge of the world," he began a sentence recommending to senators what remedies they might consider to prevent another Enron-style catastrophe.
Skilling repeatedly said "I'm not an accountant" when asked about Watkins' warnings to Lay.
Watkins testified she was afraid to take her misgivings to Skilling because he might fire her. She said she finds it "hard to believe that Mr. Skilling was not aware that something was amiss."
McMahon told the senators that Watkins' warnings "were concerning to me and I encouraged her, as others did, to see Mr. Lay about it."
Sen. Byron Dorgan, D-N.D., whose Commerce subcommittee on consumer affairs is investigating Enron, said, "Mr. Skilling has several stages of denial."
He asked Skilling about the $66 million in Enron stock he sold between February 1999 and June 2001, contrasting it with the retirement savings of Enron employees that were wiped out as the stock plunged last fall. The employees' and retirees' 401(k) accounts were loaded with Enron stock.
"You still have most of your $66 million; that family's life savings is wiped out," Dorgan told Skilling, referring to a family in North Dakota that told him it lost nearly all its $330,000.
Watkins said she believed that former chief financial officer Andrew Fastow "would not have put his hands in the Enron cookie jar" without Skilling's approval. Fastow personally made more than $30 million from running the partnerships.
Skilling said, "I relied on our accountants," when asked about Watkins' warnings that Enron stock was improperly being used as the foundation of the web of partnerships that eventually brought the company down.
"I have nothing to hide," Skilling said, explaining why he had decided to testify rather than take the Fifth Amendment like "other innocents" called before congressional committees.
At the same time, he cautioned the committee that "the framers of the Bill of Rights are watching."
"The entire management and board of Enron has been labeled everything from hucksters to criminals with a complete disregard for facts and evidence assembled," he said. "These untruths shatter lives and they do nothing to advance the public understanding of what happened at Enron."
Skilling sat without expression, listening attentively, as members of the committee opened the hearing by denouncing Enron's conduct and citing huge losses to public pension funds in their states.
"Mr. Skilling, if you plan to tell this committee that you did not understand Enron's true financial condition, then you will need to explain why, why you failed to understand things that any diligent chief executive officer would have understood," said Sen. Jean Carnahan, D-Mo.
Sen. Peter Fitzgerald, R-Ill., told Skilling there is a chess game going. "Our challenge is to find a way to check every single one of the moves you made on that Enron board," he said.
"I do, however, approach your testimony with some skepticism," Fitzgerald said.
— The Associated Press and Reuters contributed to this report.