Word: enronization
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...thing is for sure: For the business trial of the century, the Enron trial thus far has been something of a letdown - especially its peek into the Enron executive suite. Lay and Skilling may have transformed a stodgy natural-gas carrier into a global trader in everything from energy to weather futures and broadband, but the two men remained surprisingly old-school when it came to technology. Take Skilling, a Harvard School of Business grad and master of this brave new digital world. When the Federal Energy Regulatory Commission went after Enron for the California energy crisis, it built...
...When he and Berkowitz argued about the actual vs. the book value of Enron's international assets - assets that were dragging down Enron's finances -Skilling responded, with brutal honesty, that businesses don't tell all. But he hemmed and hawed for 10 minutes over a simple prosecution question about his responsibility to shareholders - refusing to admit he had done anything wrong. "We see the real Skilling here," said Michael Wynne, a former federal prosecutor who is attending the trial to prepare for case against banks that raised funds for Enron...
...prosecution's task with Skilling - and next week with Lay - is to cast doubt on their contention that they were unaware of the financial shenanigans of ex-CFO Andrew Fastow and his financial Team. How could Skilling, the man who testified he "bled Enron blue" and was involved in all major strategic decisions, not know that his lieutenants were manufacturing the numbers? In court he claimed he didn't know he had a responsibility to oversee Fastow's questionable transactions. Yet prosecutors pointed out at least one of the transactions was discussed at a board of directors' finance meeting...
...Other experts point out that Skilling's credibility has already been damaged over charges of insider trading. He and his ex-wife Susan and soon-to-be-wife Rebecca all unloaded millions of dollars' worth of stock when Enron's fortunes started to plummet. When the prosecution pressed him about the coincidence, Skilling denied talking to them about the company's fortunes, testimony that his ex-wife confirmed, somewhat unconvincingly, in court. (The jury tittered when she said she "didn't pay much attention" to her ex.) "They directly impeached him on insider trading. His story's just not credible...
...brutal as Skilling's questioning got at times, Lay could be in for a harder time on the stand. Whistleblower Sherron Watkins has testified that Lay continued to tout the company to investors and employees even after she gave him dire warnings about the Enron's finances. Skilling met with Lay the same day as Watkins, but he swears the two never discussed her allegations. If Lay doesn't contradict his co-defendant, it raises the question of why he didn't bring up the issue himself with Skilling. Did he not believe Watkins? Or not trust Skilling...