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Skilling Briefly Appears at Enron Trial

Former Enron Corp. (search) Chief Executive Jeffrey Skilling (search) made a surprise appearance on Friday at the trial of five former executives from the company's defunct Internet unit.

Skilling entered the courtroom mid-morning with hopes of hearing testimony from former Enron Broadband Services co-CEO Kenneth Rice (search), said Daniel Petrocelli, Skilling's lead defense attorney.

Petrocelli said he was unaware his client remained on the witness list of the unit's other former co-CEO, Joe Hirko. Citing a rule barring potential witnesses from the gallery, government lawyer's asked that Skilling leave the courtroom.

"Believing he was not on the list, Mr. Skilling — at my request — came to court in hopes of seeing Mr. Rice testify," Petrocelli said. "He has a very deep interest in what happens in these proceedings."

Skilling, who has pleaded not guilty to fraud charges and awaits trial in January, left shortly after arriving.

Skilling is not expected to testify at the conspiracy and fraud trial of the former broadband executives. Nevertheless, the only potential witnesses allowed to sit in the courtroom are the FBI case agents.

Tony Canales, lead attorney for broadband defendant Scott Yeager (search), said he informed Petrocelli that Skilling's name had been taken off the lists. Canales said he was unaware Hirko's legal team still listed Skilling.

On the witness stand, retired software developer David Reece underwent cross examination after testifying on Thursday that Internet operating software Enron touted in a 2000 analysts meeting was far from fruition.

Defense attorneys whittled away at Reece on Friday, getting him to acknowledge he did not believe he had information about the software that was different from that in the equities markets.

"I didn't have it in my mind that way," Reece said. "I thought it was unwise and risky to make those statements."

The Jan. 17, 2000, analysts meeting in Houston is central to the prosecution's contention that Enron overhyped its Internet division to falsely boost the share price.

Defense lawyers argue the software was in development and Enron Broadband Systems (EBS) was a serious business venture that eventually flopped like many other dot-com era start-ups.

On trial with Hirko and Yeager are former EBS technology executive Rex Shelby and two former EBS finance executives, Michael Krautz and Kevin Howard.

All face conspiracy and fraud charges. In addition, Shelby, Hirko and Yeager are accused of insider trading and money laundering. All have pleaded not guilty.

Rice pleaded guilty in a plea bargaining deal in which he agreed to cooperate with prosecutors.

The trial started Monday and is expected to run at least eight weeks.