Ex-Enron Treasurer Admits No Tangible Evidence of Wrongdoing

Enron Corp.'s former treasurer said Thursday he could not recall any notes, e-mails or other tangible proof that would support his testimony tying former Chief Executive Jeffrey Skilling to fraud and conspiracy at the failed energy giant.

Ben Glisan, who was Enron's treasurer and the only former Enron executive to go straight to prison after pleading guilty to a crime, underwent a third day of questioning — and the first under cross-examination — in the trial of Skilling and company founder Kenneth Lay.

Skilling lawyer Daniel Petrocelli noted that despite several volumes of notes that Glisan kept during his days at Enron and entered into evidence, there were only 11 references to Skilling. None suggested any wrongdoing.

Petrocelli specifically mentioned a meeting of an Enron finance committee where the discussion focused on Raptors, the fraudulent financial structures Enron used to house poor assets and investments and to hide losses. Glisan said Skilling backed the idea as a way of circumventing accounting rules.

Under intense questioning, Glisan said he had no notes, no e-mails to back up that claim.

"The conversations were quite memorable," Glisan said, defending his recollection.

Asked if he had any other records where "you could capture with vivid recall conversations with Mr. Skilling," Glisan replied: "No."

But Glisan was undeterred in his assertions that Enron's management misled investors about the health of the company, the theme of the previous day's testimony.

Peppering him with rapid-fire questions, Petrocelli asked Glisan if he had "lied all day" Wednesday when he matter-of-factly illustrated what he said was wrongdoing by the management at Enron.

"Absolutely not," Glisan said.

Glisan pleaded guilty to conspiracy in September 2003 and was immediately incarcerated because he was not yet cooperating with prosecutors.

Petrocelli also suggested his testimony was tied to the expectation he could get out of prison early.

"It's not fun," Glisan said of prison. "I would never wish this on anyone. I would very much like to be with my family."

He said he hoped his testimony would "result in some betterment of my situation," but added that a perjury charge could increase his sentence.

Lay's lawyers had yet to question Glisan.

The former treasurer's testimony Wednesday backed that of other government witnesses. Glisan said Lay misled investors and employees with upbeat statements about Enron, even after Glisan told him the company faced financial disaster.

On Oct. 22, 2001, with Enron seeking a private $500 million loan to help ease its financial woes, Glisan advised Lay that the company's liquidity and balance sheet were strained and cash flow was very weak. Credit rating agencies were increasingly questioning the company's credibility because of what they were hearing and seeing about losses and writedowns, Glisan said he told his boss.

The following day, he said he "laid out the logic" and told Lay, "Bankruptcy is inevitable."

Asked by prosecutor Kathryn Ruemmler whether Lay was surprised, Glisan said: "More accurate to say non-responsive and somewhat resigned."

Yet Lay told anxious Enron employees the next day, "The company is doing well financially and operationally," and "liquidity is fine," according to a transcript of a meeting shown to jurors.

Asked by Ruemmler if that was true, Glisan replied: "No. Our liquidity wasn't fine. It was strained.

"If you run out of money, (the company) will die," he explained.

Glisan said investor concerns were valid and described the company's condition as "dire." The company set up a special investor call the same day as the employee meeting to try to ease fears and protect its investment-grade credit rating, a lifeline that allowed Enron to more easily secure cash to do business.

Lay, visibly annoyed with the testimony, told reporters late Wednesday, "I've never heard so many lies in one day in my whole life." Lay's wife, Linda, nodded her head and said, "Unbelievable."

Glisan is the last major government witness in its case against Lay and Skilling. Prosecutors have said they hope to wind up their case with a few more witnesses next week.