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 in the '80s, a "prudency reserve." He was distressed when he was told in 2000 that the reserve had been eliminated by subordinates. (Petrocelli did not ask Skilling to explain why he did not order or work for it to be reinstated if he thought it was so critical.)
When Skilling was subsequently told shortly thereafter by fellow executive David Delainey that the prudency reserve had been reestablished, he was "thrilled," he testified.
How thrilled?
"I may have kissed him," Skilling said. "I certainly hugged him."
After some laughter in the courtroom, Skilling quickly clarified the nature of the possible kiss.
"Not like a KISS, kiss," Skilling said. "I was just happy."
Last month, Delainey testified that he, Skilling and Lay misled investors by mischaracterizing Enron's performance, becoming a valuable witness for the prosecution against Skilling.
It was hard not to think of the Skilling-to-Delainey possible-kiss as a sort of reverse of a scene in "The Godfather," when Michael Corleone kisses his brother Fredo after he learns that Fredo has betrayed him.
By Frank Ahrens |
April 12, 2006; 3:08 PM ET
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Posted by: Robert McCullough | April 12, 2006 05:30 PM
Because Skilling is a fat cat and has become a target, it is easy to forget the basis of our law. A man is innocent until proven guilty..
I believe your reports are skewed toward
his alleged guilt.
Fair and balanced---aren't those your watchwords? Jim Leavenworth, Grand Marais, Michigan
Posted by: James E. Leavenworth | April 13, 2006 02:11 PM
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The "prudency reserves" are a clear form of financial fraud. In order to hide the actual volatility of earnings, Greg Whalley and John Lavorato would "reserve" profits above their targetted levels. When times were poor they would use them to pump up earnings. Although Skillin has put a positive spin ont he health of the company when he left, Whalley and Lavorato wrote up $500 million from reserves on Spetember 14, 2001 to bail out the failing gas business. I have posted the supporting documents at www.mresearch.com.