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Former Enron executive rocks court
(AP)
Updated: 2006-03-03 10:36
Fastow's appearance would mark his first public statements about his admitted
crimes at Enron. He also is the first government witness who is not testifying
in the hopes of receiving more lenient punishment, a reason the defense has used
to undermine the testimony of his predecessors.
Another witness who finished testifying Thursday set the stage for Fastow's
appearance.
David Delainey, a former trading and retail energy executive, told jurors he
worried in 2000 whether it was proper for off-the-books financial structures
backed by company stock to serve as insurance against losses, but Fastow's
endorsement of them convinced him to go along with the plan.
The structures, known as Raptors, were "a plot of money we used to manipulate
our income statement," Delainey said in his third and final day of testimony.
"I was definitely concerned about the Enron stock part of it," said Delainey,
who headed the highly profitable Enron wholesale trading unit, Enron North
America, before shifting in 2001 to run the struggling retail business segment,
Enron Energy Services. "I certainly relied on what I heard from Mr. Fastow at
the time."
Delainey testified earlier that he first learned of the Raptors in 2000 and
that their architect, then-Enron Treasurer Ben Glisan, offered the structures as
a way for Enron North America to avoid booking losses from poor investments.
But Delainey said he found it "odd" because the structures' use of Enron
stock for capital meant the company was using its own shares in a way that could
influence its income statement.
He asked Skilling about it, and Skilling "said it had been approved,"
Delainey said.
Allegations against Skilling include that he knew the Raptors were wrongly
treated as independent of Enron and that they were used to avoid public
disclosure of decreases in asset values.
Glisan pleaded guilty in September 2003 to conspiracy in part for developing
the Raptors to help manipulate Enron's books. He is serving a five-year prison
sentence and is slated to testify against Lay and Skilling.
Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to
auditors, while Lay faces seven counts of fraud and conspiracy. If convicted,
both could serve decades in prison. Only Skilling faces allegations of improper
stock sales.
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