WASHINGTON (AP) Former Enron executive Jeff Skilling testified yesterday under tough questioning by lawmakers that he was unable to recall key events surrounding the off-the-books partnership arrangements that sent the energy trading company into bankruptcy.
He said he knew of no wrongdoing.
Skilling, the former chief executive officer, said he didn”t recall longtime colleague Andrew Fastow who collected $30 million for running the partnerships telling a board of directors meeting that Skilling would approve all the partnerships.
“You never heard” that statement? asked Rep. Billy Tauzin (R-La.).
“I was in and out of the meeting” and “I don”t recall if I was there specifically at the time Andy” made the comments, said Skilling.
He said the board meeting in West Palm Beach, Fla., took place under difficult conditions because the electric power had gone out and “the room was dark.”
When he resigned his post in August, “I did not believe the company was in any financial peril,” Skilling said in his first public testimony on the Enron disaster.
And the company”s financial statements, “as far as I knew, accurately reflected” Enron”s condition, Skilling told the House Commerce oversight and investigations subcommittee.
Skilling said he had no knowledge that the partnerships run by his longtime colleague Andrew Fastow were designed to conceal losses.
“It was my understanding that the purpose of the transactions was to provide a real hedge” locking in profits from technology investments, the former CEO said.
Skilling”s testimony came as Fastow and three other current and former Enron executives exercised their Fifth Amendment right not to testify at the House hearing.
In contrast to Skilling”s testimony, Enron”s new chief operating officer, Jeffrey McMahon, said earlier yesterday that he was transferred to a new job shortly after he complained to Skilling about the obscure partnerships in a 30-minute meeting in March 2000. McMahon was treasurer at the time of the meeting.
“His parting words to me were he understood all my concerns and he would remedy the situation,” McMahon told the subcommittee. McMahon said Skilling called shortly after the meeting and offered him a job elsewhere in the company.
McMahon was named Enron”s president and chief operating officer last week.
His testimony followed the refusal by Fastow and ex-executive Michael Kopper to testify. The two are at the center of the partnerships which kept hundreds of millions of dollars in Enron debt off the company”s books.
“On the advice of my counsel I respectfully decline to answer the questions,” said Fastow.
After telling the committee that would be his answer to all questions posed by the panel, Fastow was dismissed.
Kopper also invoked the constitutional protection against self-incrimination. Kopper saw an investment of $125,000 become $10.5 million in less than three years.
After Kopper departed, two current Enron executives, Richard Buy and Richard Causey, also declined to answer questions. Both had knowledge of the partnerships that Fastow and Kopper ran.
McMahon and ex-Enron attorney Jordan Mintz testified they were concerned about conflicts of interest arising out of Fastow”s financial interests in the partnerships while he was Enron”s chief financial officer.
Mintz suggested that the close relationship between Skilling and Fastow was an obstacle to bringing the partnerships under control.
According to McMahon, Fastow said “everything Mr. Skilling says, I hear about.”
According to Mintz, Skilling ignored Mintz”s repeated requests to meet about the partnerships.