Ex-Enron treasurer backs down on testimony

HOUSTON - A former Enron executive today backed away from his earlier testimony that former CEO Jeff Skilling pushed for a dubious deal strictly because it allowed the energy company to skirt accounting rules.

Ben Glisan, 40, the former Enron treasurer who was brought from federal prison to testify against former CEOs Skilling and Ken Lay, admitted Skilling did not directly tell members of the Enron board of directors the deal was illicit.

Skilling’s lawyer, Dan Petrocelli, attacked the statement made by Glisan on Wednesday that Skilling told the board at a May 2001 meeting the only reason he supported the deal promoted by Glisan and named Raptor was “to circumvent accounting rules.”

“Mr Skilling did not say out loud to the group that anything was improper” about Raptor? Petrocelli asked Glisan in an often contentious cross examination.

“That’s true,” Glisan answered.

Skilling, 52, faces 31 charges of conspiracy, fraud and insider trading under government allegations that he lied to investors, employees and analysts to cover up Enron’s disastrous financial condition.

Lay faces seven counts of conspiracy and fraud at the trial, which began in late January. Both men have pleaded not guilty and face decades in jail if convicted.

Glisan is the last in a string of witnesses who have been convicted for crimes at Enron, and is the only former executive currently serving a prison sentence.

Despite the grilling by Petrocelli, Glisan stuck to his core contention that both Skilling and Lay were aware of Enron’s financial problems but lied to the public even as the company spiraled toward its demise.

Glisan said that Skilling knew the Raptor deal, a sophisticated financial structure undertaken with a partnership run by former chief financial officer Andrew Fastow, had no economic purpose for the company except to absorb Enron’s market losses.

Enron collapsed in December 2001 in the largest bankruptcy of its time after its use of off-balance sheet deals to hide billions of dollars in debt and prop up earnings was revealed.

Fastow, who is set to serve a 10-year prison term after striking a plea deal with prosecutors, used Raptor and other deals to help hide poorly performing assets Enron no longer wanted. He reaped tens of millions in management fees and illicit profits from those deals.

His testimony wrapped up last week after he linked both Skilling and Lay to wrongdoing at Enron.

Glisan is halfway through a five-year prison term he received after pleading guilty to a single conspiracy charge in 2003. He also forfeited US$900,000 ($1.5 million) he received illicitly from a Fastow deal and agreed to drop claims for US$400,000 in tax refunds.

Petrocelli grilled Glisan about his cooperation from the government, but Glisan said prosecutors had no plans to request he be released early for his testimony.

Glisan, however, admitted he expected to be released in September after time off for good behavior and another 12-month reduction for completing an alcohol abuse programme.

REUTERS