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Tuesday, 26 February, 2002, 23:17 GMT
Bitter row dominates Enron hearing
Jeffrey Skilling, a former chief executive of Enron, has outraged US lawmakers by insisting he did not do anything wrong during his time at the helm of the now bankrupt energy giant.
His comments that Enron's collapse was caused by a "classic run on the bank" created such anger in a Congressional hearing that it degenerated into a slanging match at times.
Senators and witnesses alike grew increasingly frustrated as the hearing stretched on.
And Senator Byron Dorgan, who chaired the committee, expressed his discontent at the outcome.
"We don't seem to have got any closer, we'll have to keep digging," he concluded, saying it had been a miserable way to spend a day.
Senators investigating the collapse of Enron had hoped to establish who was to blame by bringing several key witnesses together.
Enron's chief operating officer Jeffrey McMahon and "whistle blower" Sherron Watkins were seated at the same table as Mr Skilling.
While Mr Skilling denied knowledge of any financial problems when he resigned, Ms Watkins and Mr McMahon both said Mr Skilling had been warned of impending problems and had failed to act.
To the apparent disbelief of senators, Mr Skilling repeatedly stressed that he had not been aware of any wrongdoing.
Given his time over again, he said, he would not have acted any differently.
Mr Skilling's defence largely rested on the fact that he was not an accountant and could therefore not be expected to understand the complexity of the transactions that he approved.
Senators were far from satisfied, pointing to Mr Skilling's business qualifications and saying that it was his responsibility, as chief executive, to make sure that he did understand.
"There are times when that Harvard MBA shows through very well, but at other times you lapse into utter confusion about accounting," Senator Dorgan said.
"I have not lied, I have not duped Ken Lay," said Mr Skilling, referring directly to comments made by Ms Watkins during previous testimony.
Mr Skilling said he had no idea how Ms Watkins had come to such conclusions.
Ms Watkins was not questioned closely about the basis of her opinions of Mr Skilling.
Mr Skilling's testimony also jarred significantly with Mr McMahon's.
Senators fired questions back and forth between Mr McMahon and Mr Skilling, asking about a discussion between the two which allegedly detailed Enron's complex financial arrangements.
The two men gave different accounts of the meeting and both said they had trouble remembering the exact details since it had occurred nearly two years ago.
Running for the exits
It is widely believed that the energy giant collapsed due to a range of complex financial partnerships that hid Enron's core debts.
But Mr Skilling insisted the company was brought down by fears about the firm's credit and accounting methods, not by the controversial off-balance sheet partnerships themselves.
"Claiming an accounting fraud in the business world is tantamount to walking into a crowded theatre and screaming 'fire' - everybody runs for the exits," he explained.
"I think if the company had some time, and had access to some liquidity... (it) would have been fine."
He also warned that concerns over the accounting practices of other firms such as Qwest and Computer Associates could create a "nuclear reaction" leading to similar disasters.
The reason for Mr Skilling's sudden departure - after just six months as chief executive - was also left unresolved.
"I was flat-out tired," he said, while Ms Watkins maintained that he jumped because he knew the ship was going down.
Mr Skilling also came under fire for the bonuses he received and the money he made from his Enron shares.
Mr Skilling admitted he still had most of the $66m (£46m) made through his stock options and had not given any to Enron's employees.
Mr Skilling argued that, with 36 separate plaintiffs filing court cases against him, it would be folly to give any cash away.
"My expectations are that I'll spend the next five to 10 years of my life battling lawsuits," he said.
Before his grilling, Mr Skilling launched a scathing attack on Congress, saying the hearings had lacked common decency, common sense and a complete disregard for fact.
Despite his criticism of the senators, Mr Skilling answered questions voluntarily. Enron's former chairman Kenneth Lay and former chief financial officer Andrew Fastow have refused to testify before Congressional investigators, claiming their constitutional right not to incriminate themselves.
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