Archive: April 2006
Johnson, Ahrens Discuss Week Ahead: Lay Wraps Up
Enron founder and former chief executive Kenneth L. Lay spent last week on the witness stand and will likely wrap up early this week. He was preceded on the stand by fellow former chief Jeffrey K. Skilling. Frank Ahrens sat down this afternoon with Post financial section reporter Carrie Johnson,...
By Frank Ahrens | April 30, 2006; 6:14 PM ET | Email a Comment
The Rashomon Option
Could Kennth L. Lay -- and Jeffrey K. Skilling before him -- be telling the truth? I had a couple of posters recently who have brought up the idea that Lay might very well not have known that some of his key employees were misbehaving. In Lay's testimony, he has...
By Frank Ahrens | April 30, 2006; 8:23 AM ET | Comments (12)
Multimedia: Mine and Others
I wanted to onpass (that's foreign correspondent-speak; pretty glamorous, eh?) a link to business columnist Loren Steffy's blog in the hometown Houston Chronicle discussing Kenneth L. Lay's remaining personal wealth. His posting kicks you to a couple of other stories as well. In testimony, Lay pegged his current net worth...
By Frank Ahrens | April 30, 2006; 2:14 AM ET | Email a Comment
Lay, Day Four: Up a Creek Without a Laptop
So there I was in the lobby of the federal courthouse, sitting on the marble floor, with my computer to my left (refusing to turn on) and my colleague Carrie Johnson's computer to my right (refusing to log on to the network). Smashing start to the day, which began a...
By Frank Ahrens | April 28, 2006; 6:50 AM ET | Comments (6)
Time's a-Wastin'
Kenneth L. Lay evidently has this much patience for things that waste his time. This trial -- specifically, this afternoon's questioning by prosecutor John Hueston about Enron's failed British water company, Wessex/Azurix -- must be a big waste of time in Lay's mind, by the way he's starting to snap...
By Frank Ahrens | April 27, 2006; 4:40 PM ET | Comments (1)
Thanks a Lot, Son
Catching up from the fall-behind this morning: The government dropped a little bomblet in this morning's testimony from Kenneth L. Lay, being cross-examined by government prosecutor John Hueston regarding Lay's son, Mark, who oversaw the family's investments. For backstory, Lay and Jeffrey K. Skilling have partially blamed stock short-sellers for...
By Frank Ahrens | April 27, 2006; 3:45 PM ET | Comments (2)
Maybe He's Not a Morning Person
Prosecutor John Hueston is hammering away at Kenneth L. Lay about the Enron founder's massive sales of company stock during the summer and fall of 2001. The prosecution contends that Lay dumped millions of dollars worth of stock when he knew the company was in trouble and did not disclose...
By Frank Ahrens | April 27, 2006; 1:43 PM ET | Comments (3)
Batter Up
Okay. Just back from lunch. Had a sammich, got some much-needed caloric uptake. Sat in the park across the street from the courthouse and listened to a cover band funk out an able version of "Boogie Oogie Oogie" by Taste of Honey. ("Everybody here tonight must boogie/You are no exception...
By Frank Ahrens | April 27, 2006; 1:27 PM ET | Comments (1)
SRO In the OPR
Perhaps drawn by press accounts of Kenneth L. Lay's testy performance on the witness stand yesterday, the Overflow Press Room (OPR) is standing-room-only today--the most crowded I've seen it. In addition to your loyal correspondents beavering away at their laptops, there appear to be plenty of civilians and new faces....
By Frank Ahrens | April 27, 2006; 11:41 AM ET | Comments (3)
Late Start on Lay Today
It would figure: On the first day Judge Simeon Lake III (SL3) says court now has to start at 8 a.m. instead of 8:30 a.m., my computer dies. How dead? "Deader than Caesar," as Sean Connery said in "The Untouchables." So I'm using my colleague Carrie Johnson's laptop while she's...
By Frank Ahrens | April 27, 2006; 10:18 AM ET | Comments (4)
Lay, Day Three: Battered and Fried
It's hard to imagine Enron founder Kenneth L. Lay having a tougher day on the witness stand than he did Wednesday. But what the heck. Let's try: Top Five Ways Ken Lay Could Have Had a Tougher Wednesday on the Witness Stand 5. He could have produced a can of...
By Frank Ahrens | April 27, 2006; 7:37 AM ET | Comments (2)
The Grilling Continues
Prosecutor John Hueston's rapid-fire attack on Kenneth L. Lay continues, regarding the topic of character assassination. Lay said he has been the victim of government prosecutors. "Sir, you have engaged in some character assassination of some of the witnesses here in this trial," Hueston said. "Are you considering yourself [on...
By Frank Ahrens | April 26, 2006; 4:42 PM ET | Email a Comment
Lay Pugnacious During Cross
At 3:08 p.m. CT, defense lawyer George "Mac" Secrest passed Kenneth L. Lay to government prosecutor John Hueston. The opening was instantly contentious. Hueston charged right in, asking a number of questions. Finally, he asked: "Is that the right response?" "It's not the right response, but you can write it...
By Frank Ahrens | April 26, 2006; 4:21 PM ET | Email a Comment
Lay by the Numbers
Kenneth L. Lay just laid out some big numbers when talking about his personal wealth: -- Net worth, 2000: $350 million. -- Net worth, 2001: $50 million. -- Net worth, today: "More or less zero," Lay said. When pressed, he said it was around $250,000. -- Total personal debt, at...
By Frank Ahrens | April 26, 2006; 3:42 PM ET | Comments (2)
Off to Valhalla
For ancient Norse Vikings (and perhaps current ones), Valhalla was the name of great god Odin's hall, the place where warriors went once slain in battle. (Klingons call it Sto-vo-kor, by the way.) For Kenneth L. Lay, it's a place he probably wanted to avoid. The prosecution will attempt to...
By Frank Ahrens | April 26, 2006; 2:12 PM ET | Comments (1)
Judge Causes Dread
Just like Jeffrey K. Skilling and Kenneth L. Lay, I -- and the rest of the press corps -- now have our fate in the jury's hands. Our fate for lunch, that is. And sleep. And Fridays off. Presiding Judge Simeon T. Lake III (SL3) hinted yesterday that he was...
By Frank Ahrens | April 26, 2006; 1:40 PM ET | Email a Comment
Unlikeable Lay?
Kenneth L. Lay continued his charm offensive in the courtroom, berating his lawyer, George "Mac" Secrest. Secrest is trying to make an argument showing that Lay is not culpable of the government fraud charges. Lay is doing his best to appear unlikeable. Secrest asked Lay about an event on Oct....
By Frank Ahrens | April 26, 2006; 12:02 PM ET | Comments (1)
Psych!
Call me overly suspicious, but it sure looks like Judge Simeon T. Lake III (a.k.a. "SL3") is messing with defense lawyer George "Mac" Secrest. Yesterday, SL3 was all over Secrest, reprimanding him for moving too slowly, for trying to introduce irrelevant evidence and for generally spoiling the judge's day. Today,...
By Frank Ahrens | April 26, 2006; 11:23 AM ET | Email a Comment
So Far, So Good
It looks like Kenneth L. Lay and his lawyer, George "Mac" Secrest got in a little rehearsal time last night. So far, their testimony has proceeded much more smoothly than yesterday's. Today, Lay is largely laying off the techno-talk and Secrest seems a little more in charge of his witness,...
By Frank Ahrens | April 26, 2006; 10:46 AM ET | Email a Comment
Lay, Day Two: The Lost Day
If I were asked to sum up what Enron founder Kenneth L. Lay and his defense lawyer, George "Mac" Secrest accomplished on the witness stand Tuesday, I'd have to say: a) Annoying Judge Simeon T. Lake III (or "SL3" to some courthouse observers), b) blaming former finance chief Andrew S....
By Frank Ahrens | April 26, 2006; 7:00 AM ET | Email a Comment
Say It Ain't So, Sim
After urging defense lawyer George "Mac" Secrest to pick up the pace at least three times on Tuesday, Judge Simeon T. Lake III suggested the courthouse equivalent of the nuclear option after the court session ended, my colleague Carrie Johnson reports. Learning that the defense expected to take two more...
By Frank Ahrens | April 25, 2006; 9:33 PM ET | Email a Comment
An Eyewitness Weighs In ... Via Cyberspace
I just got a fascinating e-mail from a former executive at an energy company that did business with Enron in 2001 (in the months leading up to Enron's collapse). The source did not want to be identified, but I verified the source's name and former employer in an e-mail exchange...
By Frank Ahrens | April 25, 2006; 4:47 PM ET | Comments (7)
I'm Losing You ...
One of Jeffrey K. Skilling's strengths on the stand was his ability -- under careful guidance of his lawyer, Daniel M. Petrocelli -- to largely avoid financial techno-speak. He slipped sometimes but usually caught himself, even cutting himself off when he realized he was sounding like an energy geek and...
By Frank Ahrens | April 25, 2006; 3:28 PM ET | Comments (3)
Who's In Charge Here?
Defense lawyer George "Mac" Secrest is theoretically directing the questioning of his client, Kenneth Lay, but he's getting led by Lay and just got manhandeld by presiding Judge Simeon Lake III. Several times during his first two days on the stand, Lay has directed Secrest, rather than the other way...
By Frank Ahrens | April 25, 2006; 11:39 AM ET | Email a Comment
By Any Other Name ...
Defense lawyer George "Mac" Secrest was just questioning Kenneth L. Lay about the company's off-balance-sheet partnerships that have drawn so much attention and contributed to the company's downfall, such as the Raptors. Other partnerships were also given tough-sounding monikers, like Osprey and Condor. "So you remember Talon, Porcupine?" Secrest asked....
By Frank Ahrens | April 25, 2006; 10:43 AM ET | Email a Comment
Journal-istic Defense
Defense lawyer George "Mac" Secrest just showed a blowup of an Oct. 17, 2001, article in the Wall Street Journal on the courtroom screen. One of the prongs of the defense strategy is blaming a series of Journal articles that it claims were unduly negative, leading to a crisis of...
By Frank Ahrens | April 25, 2006; 10:24 AM ET | Email a Comment
Off With a Bang
The second day of Kenneth L. Lay's defense testimony started with a bang: He said he never discussed whistleblower Sherron Watkins's memo, which warned of accounting problems at the company -- with Jeffrey K. Skilling. Watkins was the Enron insider who wrote a memo in the summer of 2001 that...
By Frank Ahrens | April 25, 2006; 9:48 AM ET | Comments (2)
Lay, Day One: All Business, No Smiles
It's unusual to see a picture of Enron founder Kenneth L. Lay when he's not smiling. Lay was the public face of Enron, with his happy Jack-o'-lantern eyes and occasional flyaway hair (part of the huggable multimillionaire's charm). Each morning for the three weeks that I've been here and watched...
By Frank Ahrens | April 25, 2006; 7:00 AM ET | Comments (1)
The Slightly Scary Uncle
Before Jeffrey Skilling took the stand, there was much anticipation about how he'd handle tough cross-examination, given his legendary temper and inability to suffer fools. The phrase most often used to describe Ken Lay, currently on the stand, seems to be "avuncular." Skilling indeed provided some fireworks but kept himself...
By Frank Ahrens | April 24, 2006; 3:00 PM ET | Comments (6)
The Men of Enron: Skilling
Last week's appearance on the witness stand of Susan Lowe, Jeffrey Skilling's first wife, was mesmerizing. Some of the folks who read my description of her took offense, questioning why I had not subjected Skilling and co-defendant Kenneth Lay -- who took the stand this morning on six counts of...
By Frank Ahrens | April 24, 2006; 2:25 PM ET | Comments (3)
E-literate Enron Executives
It has occurred to me that for two guys who spent a lot of money and time on trying to trade broadband capacity, and speaking to investors about the business in soaring, technical terms, both Jeffrey K. Skilling and Kenneth L. Lay were Luddites when it came to the Internet....
By Frank Ahrens | April 24, 2006; 12:47 PM ET | Comments (1)
Hang On There, Podner
Barely two hours into his time on the stand, Enron founder Kenneth L. Lay has asserted his personality and displayed a very different style from that of his predecessor in the box, co-defendant Jeffrey K. Skilling. Lay is crafting a combination of down-home and don't-mess-with-Texas attitude in his responses to...
By Frank Ahrens | April 24, 2006; 11:24 AM ET | Email a Comment
Lay Takes the Stand
Enron founder Kenneth L. Lay took the stand in his defense against six fraud counts this morning around 8:40 a.m. CT. Asked by his defense lawyer what it's been like to sit in the courtroom for the past 13 weeks and watch the trial, Lay said, "It's been interesting. A...
By Frank Ahrens | April 24, 2006; 10:04 AM ET | Comments (1)
Johnson and Ahrens Discuss the Week Ahead: Lay on the Stand
Former Enron chief executive Jeffrey K. Skilling finished nearly eight full days on the witness stand on Thursday, defending himself against 28 counts of fraud, conspiracy and insider trading charges. Today, Enron founder Kenneth L. Lay takes the stand, facing six counts of fraud. Frank Ahrens sat down with Business...
By Frank Ahrens | April 24, 2006; 7:20 AM ET | Email a Comment
Love Letter to a Letter
During Enron's brief, Icarian lifespan, the company was known by its logo -- the tilted E. A block of granite occupies the wedge outside Enron's headquarters that once held a prominent example of its constructivist heraldry. (Frank Ahrens-The Washington Post) A capital sans-serif E, rotated 45 degrees counterclockwise, was the...
By Frank Ahrens | April 23, 2006; 9:30 AM ET | Comments (4)
... Where No Corporation Has Gone Before
Those of you who know me, or may have read me, are surely surprised that I've been writing a blog for nearly three weeks now and have yet to make a "Star Trek" reference. The wait is over. Two things happened on Friday that led me to remember a third...
By Frank Ahrens | April 22, 2006; 1:56 AM ET | Email a Comment
Skilling, Day Eight: Cast of Characters
Scorecards! Get yer scorecards! You can't tell the characters in the character-witness lineup without a scorecard! On Thursday afternoon after former Enron chief executive Jeffrey K. Skilling wrapped up nearly nine days on the stand, his defense team brought forth a parade of testimonials designed to persuade the jury Skilling...
By Frank Ahrens | April 21, 2006; 7:40 AM ET | Comments (4)
The Apparition of the First Wife
I could write that Jeffrey K. Skilling's first wife, Susan Lowe, was called to the stand this afternoon as a character witness for the accused, but it would be more accurate to say that she materialized in the witness box. She was ghostlike in her mien and manner, tremulous but...
By Frank Ahrens | April 20, 2006; 4:31 PM ET | Comments (14)
The Old Girlfriend Pops Back Up
On his re-cross-examination of Jeffrey K. Skilling, prosecutor Sean Berkowitz just accused the defendant of backdating a $10,000 check to his former girlfriend, Jennifer Binder, to avoid paying taxes on it in 1998. Skilling said he does not remember writing the check or another $10,000 check that were gifts to...
By Frank Ahrens | April 20, 2006; 12:05 PM ET | Email a Comment
What's My Line?
Jeffrey K. Skilling's eighth day (wow!) on the stand started with a little levity between Skilling and his lawer, Daniel M. Petrocelli, who is engaged in redirect examination of his client. Petrocelli asked Skilling a question. Skilling said he didn't remember. Petrocelli asked the question a different way, with no...
By Frank Ahrens | April 20, 2006; 9:46 AM ET | Email a Comment
Skilling, Day Seven: Your Witness -- Now!
Federal prosecutor Sean Berkowitz ended his three-day cross-examination of Jeffrey K. Skilling this afternoon as abruptly as Skilling quit Enron in August 2001. I wish I could take credit for that line, but I can't. Reporter Mark Babineck of the hometown Houston Chronicle made the excellent quip mid-afternoon on Wednesday...
By Frank Ahrens | April 20, 2006; 7:14 AM ET | Comments (1)
Skilling to Lucent?
Federal prosecutor Sean Berkowitz just brought his cross-examination of Jeffrey K. Skilling to an abrupt and surprising close. On the courtroom screen, he listed all 11(!) reasons Skilling cited for leaving Enron. Primary among them was to spend more time with his family, Skilling said. But Berkowitz hauled out a...
By Frank Ahrens | April 19, 2006; 3:45 PM ET | Email a Comment
Baby, You Can Drive My VAR
The second half of this morning's testimony was a mind-numbing discussion of Enron's risk analysis. I couldn't see the jurors but if I had, I bet they all had little X's where their eyes should have been. Basically, it came down to this: Prosecutor Sean Berkowitz claiming that former Enron...
By Frank Ahrens | April 19, 2006; 1:52 PM ET | Comments (3)
Sun Day in Houston
I thought things were looking poorly when I touched down here on April 4 and the temperature was 87 degrees with the humidity about the same. But then the weather turned downright idyllic, with temps in the 70s and a near-perfect saturation of water molecules in the atmosphere. But Texas...
By Frank Ahrens | April 19, 2006; 11:39 AM ET | Email a Comment
Mining Metadata
Metadata is data about data. For instance, a time stamp on a digital picture you take--if the picture is data, the time-stamp tells you when that data was created. It is metadata. Federal prosecutor Sean Berkowitz just whipped out a little metadata to whip up on former Enron chief executive...
By Frank Ahrens | April 19, 2006; 10:50 AM ET | Email a Comment
Skilling, Day Six: Boys and Men
If Jeffrey K. Skilling ended his first day of cross-examination jabbed into a corner by federal prosecutor Sean Berkowitz, the former Enron chief executive opened Round 2 on Tuesday seeming determined to punch his way out, snapping back at Berkowitz in self-defense. These two are hardly standing toe-to-toe, slugging it...
By Frank Ahrens | April 19, 2006; 7:00 AM ET | Email a Comment
Berkowitz to Skilling: Gotcha!
Federal prosecutor Sean Berkowitz, in his cross-examination of former Enron chief executive Jeffrey K. Skilling, just produced a "gotcha" moment when discussing the company's troubled broadband division, which crashed in early 2001 along with a number of tech stocks. Berkowitz produced a script that Skilling was supposed to read from...
By Frank Ahrens | April 18, 2006; 4:52 PM ET | Comments (6)
Judge Sim Keeps 'Em Comin'
It seems that prosecutor Sean Berkowitz made a mistaken assumption about his rival, defense lawyer Daniel M. Petrocelli, representing former Enron chief executive Jeffrey K. Skilling. Addressing the jury, Berkowitz said he would avoid a lengthy discourse on a particular topic, saying that "Mr. Petrocelli's going to have an awful...
By Frank Ahrens | April 18, 2006; 4:02 PM ET | Email a Comment
Whoa, Nellie!
Legendary sportscaster Keith Jackson is known for his country twang and down-home phrases. One of his best, when describing rival football teams: "These two teams plain don't like each other!" It looks like it's shaping up that way between former Enron chief executive Jeffrey K. Skilling and federal prosecutor Sean...
By Frank Ahrens | April 18, 2006; 3:25 PM ET | Email a Comment
Two Stories on the Sat Phone
Last week, former Enron chief executive Jeffrey K. Skilling testified that, when he went on a summer 2000 trip to Africa with his son and brother, he rented a satellite phone. From the stand, Skilling joked that the phone only held a charge for about 20 seconds and its only...
By Frank Ahrens | April 18, 2006; 12:46 PM ET | Email a Comment
Skilling Goes 'Hazy'
More than once, former Enron chief executive Jeffrey K. Skilling has testified that he was "hazy" on key details under questioning. Well, here in the Overflow Press Room (OPR), Skilling has gone literally hazy several times this morning. We're five floors below the courtroom where Skilling is on the stand....
By Frank Ahrens | April 18, 2006; 12:20 PM ET | Email a Comment
Raptors Explained?
Here's how federal prosecutor Sean Berkowitz just took a swipe at explaining Enron's complicated Raptor transactions, which the government charges Enron used to hide losses: "If we have a car that's valued at $1,000 and it's on Enron's balance sheet for $1,000 and it moves into the Raptors, it stays...
By Frank Ahrens | April 18, 2006; 10:41 AM ET | Comments (8)
Skilling, Day Five: Lace 'em Up
Monday was former Enron chief executive Jeffrey K. Skilling's first day on the stand in the hands of lead government prosecutor Sean Berkowitz. Last week, Skilling spent the week taking questions from his lawyer, Daniel M. Petrocelli, who guided him deftly through the testimony. Yesterday was different. Skilling was up...
By Frank Ahrens | April 18, 2006; 7:25 AM ET | Comments (5)
Sex and the Conflict of Interest
Under questioning from federal prosecutor Sean Berkowitz, former Enron chief executive Jeffrey K. Skilling testified that he made a "small" investment of about $60,000 in an online photo business set up by former company photographer Jennifer Binder, which Skilling testified did business with Enron with a "small" contract. Berkowitz asked...
By Frank Ahrens | April 17, 2006; 3:03 PM ET | Email a Comment
The Crowd Arrives
Today is the first day since I've been here that the Overflow Press Room (OPR) is pretty much packed. It being the first day of former Enron chief executive Jeffrey K. Skilling's cross-examination at the hands of federal prosecutors, it makes sense. The media contingent is about the same size...
By Frank Ahrens | April 17, 2006; 2:55 PM ET | Comments (1)
Poking at the Tiger
A few moments ago, one reader commented that prosecutor Sean Berkowitz's early pounce on former Enron chief executive Jeffrey K. Skilling may have set the tone for the coming days. This courtroom sketch shows lead prosecutor Sean Berkowitz, left, cross examining former Enron executive Jeffrey K. Skilling, right, as Skilling's...
By Frank Ahrens | April 17, 2006; 2:20 PM ET | Email a Comment
Berkowitz Strikes
Federal prosecutor Sean Berkowitz just showed a lighting-like ability to strike at former Enron chief executive Jeffery Skilling's character, which has been portrayed as arrogant. Berkowitz is cross-examining Skilling in his fraud trial. Talking about Enron's international assets, Berkowitz was ticking off all the problems Skilling saw with having assets...
By Frank Ahrens | April 17, 2006; 11:53 AM ET | Comments (6)
He's Got A Million of 'Em ...
The wry Judge Simeon Lake III has provided frequent relief from the sober nature of the fraud trial of former Enron chief executive Jeffrey K. Skilling with his drawling quips. "Judge Sim" kicked off the 12th week of the trial this morning by handing over the questioning to goverment prosecutor...
By Frank Ahrens | April 17, 2006; 10:48 AM ET | Email a Comment
Johnson and Ahrens Discuss the Week Ahead: Prosecutors Gets a Turn at Skilling
Former Enron chief executive Jeffrey Skilling spent all four days of last week's trial under friendly questioning from his lawyer, Dan Petrocelli. Starting Monday, it's the government's turn. Federal prosecutor Sean Berkowitz will lead the cross-examination. Prosecutors have charged Skilling with 28 counts of fraud, conspiracy and insider trading. Skilling...
By Frank Ahrens | April 17, 2006; 8:02 AM ET | Comments (1)
Talking to Chuck
Newcomers to this trial, such as me, were surprised that a taped telephone conversation between former Enron chief executive Jeffrey Skilling and his stockbroker was presented by Skilling's defense during Thursday's testimony. It was no surprise that Skilling would be talking to his broker -- he held a lot of...
By Frank Ahrens | April 16, 2006; 4:03 PM ET | Comments (1)
Sorry, I Wasn't Around
Former Enron chief executive Jeffrey Skilling took a trip to Tanzania for three weeks with his son and brother in the summer of 2000 and embarked on a rafting trip in August 2001, just after he resigned from the company. Both trips have turned out to have been propitiously timed...
By Frank Ahrens | April 16, 2006; 12:15 PM ET | Email a Comment
The Business of Language
I'm out at a popular downtown bar around 11 o'clock on Friday night, doing a little work, sitting at a sidewalk table. The city's light rail trains glide by. Right behind me are four men of about my age or a little older. A few are smoking cigars. They are...
By Frank Ahrens | April 15, 2006; 3:54 PM ET | Email a Comment
On the Town, Texas Style
This is a couple of days late, but it's the first time I've had a chance to sit down and type it up: On Wednesday night, my colleague Carrie Johnson and I were out, having some dinner, hashing over the day's testimony from former Enron chief executive Jeffrey Skilling. At...
By Frank Ahrens | April 15, 2006; 3:18 PM ET | Email a Comment
Skilling Day Four: Just a Guy Trying to Make An Honest Buck
Former Enron chief executive Jeffrey Skilling wrapped up the first part his defense testimony on Thursday, spending all four days of this week's trial (trial is in recess on Fridays) attempting refute the government indictment nearly point-by-point. Defense attorney Daniel Petrocelli, left, questions Jeffrey Skilling, center, as co-defendant and Enron...
By Frank Ahrens | April 14, 2006; 6:59 AM ET | Comments (1)
First It Was the British...
Under questioning from his lawyer, Dan Petrocelli, former Enron chief executive Jeffrey Skilling is explaining his sales of Enron stock. After he left the company in August 2001, he said he had "two good ideas for investing: one was holding onto Enron and the other was shorting AES." Skilling explained...
By Frank Ahrens | April 13, 2006; 5:32 PM ET | Comments (1)
Don't Mess with Britain
Defense lawyer Dan Petrocelli is making former Enron chief executive Jeffrey Skilling tick off his income, his assets, everything he has that's worth money, as a way of showing that he was, at one point, a wealthy man who did not need to pump up the Enron stock to make...
By Frank Ahrens | April 13, 2006; 4:00 PM ET | Comments (2)
Oh, No! It's Mr. Bill!
Some of the more potentially damaging testimony against former Enron chief executive Jeffrey Skilling came last month from former Enron broadband executive Kevin Hannon. Hannon testified that, at a meeting, Skilling had read an analyst report that questioned the company's finances. "They're onto us," Hannon testified that Skilling said. Hannon...
By Frank Ahrens | April 13, 2006; 2:49 PM ET | Email a Comment
More Mainstream-Media Bashing
So, heading back into the courthouse today after the lunch break, I stepped into the elevator and held it open for two ladies walking in behind me. They thanked me in a nice Texas twang. They eyed the courtroom badge I have to wear and mistook me for a potential...
By Frank Ahrens | April 13, 2006; 2:08 PM ET | Comments (2)
Skilling Attacks
Former Enron chief executive Jeffrey Skilling just launched into a long, surprisingly timed and barbed jeremiad against government prosecutors during a reading of the government's indictment relating to March 2001 call with analysts -- a time when the company's stock was dropping. Skilling accused prosecutors of "rewriting history." Jeffrey Skilling,...
By Frank Ahrens | April 13, 2006; 12:02 PM ET | Comments (1)
Skilling Day Three: Faster, Faster!
Toward the end of former Enron chief executive Jeffrey Skilling's testimony on Wednesday, his third day on the stand in his defense, I looked down at my laptop and saw that I had typed, in all-caps, "WHY SO FAST???" Skilling was talking about the end of 1999, as Enron was...
By Frank Ahrens | April 13, 2006; 6:49 AM ET | Comments (1)
More Hugging at Enron, Plus Some Kissing
On Tuesday, defense lawyer Dan Petrocelli asked former Enron chief executive Jeffrey Skilling about "bear hugs." Today things got even more intimate. Petrocelli was questioning Skilling about Enron's reserves -- set-asides that would kick in if the company experienced certain losses. Skilling was describing the initial reserve he set up...
By Frank Ahrens | April 12, 2006; 3:08 PM ET | Comments (2)
Skilling ... Outside of the Box
Defense lawyer Dan Petrocelli has asked former Enron chief executive Jeffrey Skilling to leave the witness box twice this morning to stand before a chart and explain the nature of Enron's unorthodox business and financing to jurors. In this courtroom sketch, former Enron executive Jeffrey Skilling points to a chart...
By Frank Ahrens | April 12, 2006; 12:08 PM ET | Comments (2)
Here Come the Raptors!
The infamous Raptor deals raised their head first thing off the bat this morning in former Enron chief executive Jeffrey Skilling's third day on the stand in his defense. Skilling said that in the spring of 2000, a number of high-tech companies that Enron had invested in were preparing to...
By Frank Ahrens | April 12, 2006; 11:32 AM ET | Email a Comment
Skilling, Day Two: Of Bear Hugs and Barges
On Tuesday, there was talk of bear hugs and Nigerian barges. To try understand what these two seemingly disparate concepts have to do with Enron is to gain a glimpse into how sprawling this company was at its height and how many far-flung, grandiose projects it tried, one of which...
By Frank Ahrens | April 12, 2006; 7:32 AM ET | Comments (1)
Skilling Hits Fastow Hard
In afternoon questioning by defense lawyer Dan Petrocelli, former Enron chief executive Jeffrey Skilling said that in the spring of 2001 he was becoming "more and more exasperated with Mr. [Andrew] Fastow and these LJM transactions." Jeffrey Skilling, right, and attorney Dan Petorcelli arriving Tuesday morning for Skilling's second day...
By Frank Ahrens | April 11, 2006; 4:57 PM ET | Email a Comment
Diving Into the LJMs
This afternoon's session is focusing on the LJM partnerships -- the outside-of-Enron groups controlled by former Enron chief financial officer Andrew Fastow that are at the heart of the scandal. Fastow pleaded guilty to fraud and is cooperating with government prosecutors. He admits to siphoning Enron money into his LJM...
By Frank Ahrens | April 11, 2006; 3:41 PM ET | Comments (1)
A Breakthrough!
Former Enron chief executive Jeffrey Skilling may have just told jurors what Enron did in a language folks can actually understand: "If you think about what Enron does, Enron sells reliable delivery and predictable prices..." of natural gas and electricity. That's something you can wrap your head around. It's also...
By Frank Ahrens | April 11, 2006; 12:20 PM ET | Comments (1)
Explaining Earnings Numbers
As he sought to explain the "overview" budget numbers earlier today, defense lawyer Dan Petrocelli is now having former Enron chief executive Jeffrey Skilling explain how an earnings-per-share number can go from 30 cents to 31 cents in one day to meet Wall Street quarterly earnings expectations. One of the...
By Frank Ahrens | April 11, 2006; 12:02 PM ET | Email a Comment
Chipping Away at the Prosecution's Case
Defense lawyer Dan Petrocelli is using former Enron chief executive Jeffrey Skilling to chip away at the government's indictment. Federal prosecutors have charged Skilling with 28 counts of fraud. Petrocelli is asserting that the government did not understand Enron and misinterpreted legal and standard Enron activities and terminology as being...
By Frank Ahrens | April 11, 2006; 11:12 AM ET | Comments (2)
Skilling, Day One: Put On a Human Face
Former Enron chief executive Jeffrey Skilling did about six sometimes emotional hours on the stand during his first day of testimony on Monday. His defense lawyer, Dan Petrocelli, seemed to be using Skilling to lay the groundwork for two points: In this artist's rendering, former Enron executive Jeffrey Skilling explains...
By Frank Ahrens | April 11, 2006; 8:47 AM ET | Email a Comment
...By Any Other Name
During afternoon testimony, former Enron chief executive Jeffrey Skilling told jurors that he'd had at least two nicknames bestowed upon him: * A.B., short for "All Business." Friends of Skilling's college girlfriend named him this for his devotion to his business studies. As a mechanical engineering student, Skilling testified that...
By Frank Ahrens | April 10, 2006; 5:23 PM ET | Email a Comment
How Is a Cow Like Natural Gas?
Former Enron chief executive Jeffrey Skilling spent much of the afternoon session today describing Enron's ascent and educating jurors on Enron's first "gas bank" -- the revolutionary mechanism for buying and selling natural gas that Skilling devised while working for Enron as a consultant for McKinsey & Co. and which...
By Frank Ahrens | April 10, 2006; 4:56 PM ET | Email a Comment
Skilling's Perp Walk Memories
During afternoon testimony, former Enron chief executive Jeffrey Skilling described his personal "perp walk" experience on the day in February 2004 when he surrendered to the FBI and was processed at a Houston courthouse. A perp walk happens when law enforcement officials parade a suspect by a bank of media...
By Frank Ahrens | April 10, 2006; 3:59 PM ET | Email a Comment
Skilling Takes the Stand
Former Enron chief executive Jeffrey Skilling, on trial for 28 charges of fraud, finally took the stand this morning. "How are you?" asked defense lawyer Dan Petrocelli. "A little nervous," Skilling replied. "Why are you nervous?" Petrocelli asked. "I guess in some ways, my life is on the line," Skilling...
By Frank Ahrens | April 10, 2006; 11:42 AM ET | Email a Comment
Wanna Buy Some Enron Stock?
Under government cross-examination, former Enron general counsel James Derrick revealed that he sold about $6 million worth of Enron stock in 2001. But moments later, as defense lawyers took over, Derrick said that he retained stock that was worth as much as $80 million at one point. He said he...
By Frank Ahrens | April 10, 2006; 10:58 AM ET | Email a Comment
Waiting For the Main Act
Former Enron general counsel James Derrick opens today on the stand, as the government wraps up its cross-examination. Prosecutor John Hueston is grilling Derrick on the investigation of Enron whistleblower Sherron Watkins's claims that certain Enron deals seemed fishy. This is important testimony for the government, as it attempts to...
By Frank Ahrens | April 10, 2006; 10:08 AM ET | Email a Comment
Johnson and Ahrens Discuss Skilling's Coming Testimony
Former Enron executives Kenneth Lay and Jeffrey Skilling return to the federal courthouse in Houston on Monday as their trial on federal fraud charges continues. Former Enron CFO Jeffrey Skilling is scheduled to take the stand today in Houston. (AP Photo) Skilling, the company's former chief executive, is set to...
By Frank Ahrens | April 9, 2006; 9:17 PM ET | Email a Comment
Neighborhood Bonding
With much civic pride, Houston has named certain areas of its city and hung appropriate banners about. The downtown skyscraper area is called "The Skyline District." A few blocks over is "The Museum District," for obvious reasons. I'm not saying my hotel is in a bad part of town, but...
By Frank Ahrens | April 8, 2006; 2:43 PM ET | Comments (1)
And The Other Side of the Story
Through Thursday morning and into the afternoon, defense lawyers painted their picture of how well former Enron general counsel James Derrick knew the company's earnings reports and how he handled the investigation into Enron insider Sherron Watkins's grave concerns about the accounting of certain Enron deals. The testimony was flattering...
By Frank Ahrens | April 7, 2006; 12:33 AM ET | Email a Comment
Still Waiting For Skilling
After the trial recessed for the weekend (they take Fridays off), Jeffrey Skilling and his lawyer, Dan Petrocelli, briefly spoke to reporters. Petrocelli promised that his client would take the stand on Monday and predicted the testimony would last an entire week. When asked about the wait, Skilling replied, "It's...
By Frank Ahrens | April 6, 2006; 6:33 PM ET | Comments (2)
Some Fireworks During Derrick Cross-Examination
Things heated up for the first time today when government prosecutor John Hueston questioned former Enron general counsel James Derrick about a memo Enron lawyer Lance Shuler had written raising similar concerns to those expressed by whistleblower Sherron Watkins. Shuler said previously that he had talked to Derrick about the...
By Frank Ahrens | April 6, 2006; 5:37 PM ET | Email a Comment
Derrick on Cross-Examination
The prosecution takes its turn at former Enron general counsel James Derrick as government lawyer John Hueston begins cross-examination....
By Frank Ahrens | April 6, 2006; 4:16 PM ET | Email a Comment
Michael Jordan Accounting
One of the assertions made by Enron executives, at least at the time that the whole shebang started to collapse, was that Enron was already in the 21st century in terms of the advanced deals it was trying, no longer trading just oil and gas but broadband space and anything...
By Frank Ahrens | April 6, 2006; 4:14 PM ET | Email a Comment
One Side of the Story
As James Derrick edges toward the conclusion of his time on the stand at the hands of defense lawyers, here is a list of our takeaways: * Jeffrey Skilling left the company because he came face-to-face with the human cost of his business, after visiting the families of Enron employees...
By Frank Ahrens | April 6, 2006; 3:31 PM ET | Email a Comment
The First Thing We Do, Let's Hire All the Lawyers
The ongoing testimony of James Derrick, Enron's former general counsel, has shed some light on Enron's remarkable affinity for lawyers. To wit: -- Enron had 200 in-house lawyers. -- In addition, the company employed more than 100 outside law firms from around the world. -- Among the Houston outside firms...
By Frank Ahrens | April 6, 2006; 12:35 PM ET | Email a Comment
Seats and Laps, Part 2
I've got a better set-up in the OPR today than yesterday. I got here early this morning and procured one of the comfy green-leather armchairs and pulled one of the flip-top desk-chairs in front of me. Now, I've got the laptop sitting on the desk, suspended well above my own...
By Frank Ahrens | April 6, 2006; 12:21 PM ET | Email a Comment
A Trip Down a Painful River
A morning of fairly dry testimony just took an unexpectedly emotional turn as former Enron general counsel James Derrick reamins on the stand. Defense lawyer Mark Holscher was using Derrick to paint a different picture of Jeffrey K. Skilling in the summer of 2001 than is widely accepted. That was...
By Frank Ahrens | April 6, 2006; 11:51 AM ET | Email a Comment
Waiting for Skilling
Coming out of the courthouse cafeteria this morning, I glanced over at the folks queued up to walk through the metal detector and there was Jeffrey K. Skilling, in a dark suit and modest tie, politely showing his ID to the guard. "Mr. Skilling," one of the guards said, "how...
By Frank Ahrens | April 6, 2006; 9:45 AM ET | Email a Comment
Cover Boys of the '90s
In yesterday's testimony, former Enron general counsel James Derrick said part of his favorable impression of former chief financial officer Andrew S. Fastow -- who has pleaded guilty to fraud, is cooperating with the government and faces up to 10 years in prison -- was crafted by the great press...
By Frank Ahrens | April 6, 2006; 7:20 AM ET | Comments (1)
Judge Lake Cracks 'Em Up
Presiding Judge Simeon "Sim" Lake III kept a light hand as the testimony dragged on today and got increasingly complicated. But he wasn't about to let the lawyers slip. At one point, defense lawyer Mark Holscher, thwarted in an attempt to try one tack, asked Lake: "Can I try ..."...
By Frank Ahrens | April 5, 2006; 6:53 PM ET | Email a Comment
Hold That Thought ...
There was a dramatic exchange underway that was quite undramatically cut off by the judge, who just called for an afternoon break. On the stand was Enron's former general counsel, James Derrick. Under cross-examination from the government, Derrick was questioned about his estimation of Andrew S. Fastow, Enron's former chief...
By Frank Ahrens | April 5, 2006; 6:46 PM ET | Email a Comment
Seats and Laps
Toward the end of my first day here in the overflow press room (OPR), an observation regarding seating: We press have a choice of two types of seats -- very comfy green-leather juror seats with arm rests that look like they should be in a hunting club -- or less-comfortable...
By Frank Ahrens | April 5, 2006; 6:17 PM ET | Email a Comment
Tranquility Base, Houston Here ...
Four years ago, I came to Houston to cover the beginning of the Enron story. The scene then: A former company vice chairman had just killed himself, the FBI had begun a document-shredding investigation, chief executive and founder Kenneth L. Lay had resigned, congressional hearings commenced, the ripples of impropriety...
By Frank Ahrens | April 5, 2006; 2:42 PM ET | Comments (2)
