Angry Skilling: Gov't Ignored Facts

Former Enron Corp. Chief Executive Jeffrey Skilling struggled to hold his temper Thursday at being pegged a liar and a crook by federal prosecutors, telling jurors in his criminal trial that he was devastated the company he cherished became a symbol for scandal.

"I think they have purposely not looked at facts they should have looked at if they wanted to come to a more balanced and accurate conclusion," Skilling declared with hardened eyes and a stiff jaw.

His comments came as defense lawyer Daniel Petrocelli led him through the government's indictment, which accuses him of minimizing bad news in 2001 so investors and Wall Street would remain bullish on failing Enron ventures in broadband and retail energy.

Skilling almost took over the questioning, interrupting when Petrocelli said, "Let's go on to the next sentence" in the indictment, with a tense, "Yes, let's go on to the next sentence."

Finally, he tried to rein in his visible anger.

"I'm sorry, I have to calm down here," Skilling said in a tight voice.

Rather than return to routine questioning, Petrocelli let the plainspoken ex-CEO known for speaking his mind roll with it.

"These are serious accusations?" Petrocelli asked.

"These are serious accusations," Skilling repeated tightly. "This is a total misrepresentation, in my view, of the state of events that was occurring at the time, and I believe it would be very easy for someone to confirm that if they had any interest in confirming that."

He and his co-defendant, Enron founder Kenneth Lay, have complained that witnesses who could corroborate their claim that no fraud occurred at Enron won't step forward for fear of being targeted by prosecutors. Skilling has also said that the ex-Enron executives who have pleaded guilty to crimes cut deals with prosecutors — even though he says they did nothing wrong — out of fear of expensive trials and lengthy prison terms.

Skilling said he was crushed, not only because Enron spiraled into bankruptcy proceedings in December 2001, but also because there had been "a lot of damage to individuals subsequent to that, which was not a result of facts, or what really happened, but a result of rewriting of history to accomplish certain objectives people have that are not consistent with what happened in the company."

"Did you believe you firmly had your hand on the wheel?" Petrocelli asked.

"Yes, I did," Skilling replied.

"Did you think you were defending your company?" the attorney pressed.

"Yes I did," Skilling said.

"Did you think you had to lie to defend your company?" Petrocelli asked.

"No, I did not," the ex-CEO declared.

Prosecutors allege Skilling and Lay repeatedly lied to investors and employees about Enron's health, using false optimism to hide weak business ventures and accounting tricks to create an image of success. They attribute the failure of what was once the country's seventh-largest company to bad publicity and lost market confidence.

Much of Skilling's testimony since he took the witness stand on Monday has featured his fond memories of leading the transformation of a staid pipeline company to an energy giant that pioneered new trading markets.

"I bled Enron blue," he told jurors Thursday, invoking a company slogan for loyalty. "I believed in this company. I believed this was a fine company (in 2001) ... a vibrant company in fact having some of the best financial performance in the history of the company."

Jurors began to take notes during Skilling's rant.

Prosecutors have presented a string of witnesses — including eight ex-Enron executives who have pleaded guilty to crimes — who gave a starkly different view than the defendant. They bolstered government contentions that Skilling knew Enron turned to fraud to appear successful — or at least he knew some divisions were struggling when he said publicly they were strong.

Skilling told jurors Thursday he was devastated by Enron's demise.

"Are you just devastated because you believe you've been falsely accused?" Petrocelli asked.

No, Skilling said, he was devastated because what he believed was a fine corporation "was brought to its knees," and that "horrific failure" was "made worse by this sort of ... these sorts of ... inaccuracies," he said evenly.

Petrocelli then twice asked Skilling if he needed a break, to which he twice replied, "No, I'm OK."

Earlier, Skilling denied allegations that he hyped Enron's broadband venture to maintain Wall Street buzz when he knew it was failing.

Unveiled to Wall Street in 2000, Skilling billed the unit to dazzled analysts as a potential multibillion-dollar business that would stream video to homes on Enron's fledgling broadband network and trade Internet bandwidth.

Several government witnesses, including former broadband unit CEO and Skilling ally Kenneth Rice, said Skilling minimized the division's problems.

Mark Koenig, Enron's former investor relations chief, testified in February that Skilling turned to him to answer an analyst's question about the broadband unit's revenue makeup. Koenig said he lied to stave off more probing questions about why the unit wasn't earning more money from its main missions. Koenig acknowledged he wasn't told to lie, and that he didn't know if Skilling knew he lied.

"I'm not sure it occurred to me it was incorrect," Skilling testified Thursday.

"Did you knowingly tell Mr. Koenig to answer a question falsely while you were on these analyst calls?" asked Skilling's lead lawyer, Daniel Petrocelli.

"No," Skilling said.

Rice and others testified for the prosecution that Skilling in mid-2000 also minimized the amount of revenue the unit earned from sales of inoperative fiber optic cable so that analysts would believe more income stemmed from actual business operations.

Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy.