Glisan: Lay Giggled “in Delight” over Raptors

An ex-Enron treasurer testifies that CEO Kenneth Lay delighted in the company's complex financing deals, and later sought to gauge the amount of reported loss credit analysts could stomach.


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During all-day testimony Wednesday, former Enron treasurer Ben Glisan backed earlier statements by former CFO Andrew Fastow that ex-CEO Kenneth Lay misled employees about losses on international assets. He also suggested that Lay was intimately involved in efforts to conceal the company’s true condition from credit and equity analysts, according to trial coverage by the Houston Chronicle.

During one potentially damaging exchange for the defense, Glisan reportedly told prosecutor Kathy Ruemmler that Lay giggled “in delight” during a discussion of the now-infamous Raptors transactions at a board of director’s finance committee meeting. The Raptors transactions hid debt in special purpose entities. According to the Powers Report, produced by a special investigative committee of Enron board after the company’s collapse, the Raptors transactions had the largest financial statement impact of any of Enron’s many off-balance sheet transactions.

Glisan also gave jurors a look at what was going on inside Enron as the company struggled to avoid a ratings downgrade. Glisan first took the stand Tuesday, following Standard & Poor’s analyst Ron Barone, who described his own conversations with company officials as they struggled to keep a BBB-plus rating.

During Glisan’s testimony, the Chronicle reports, he described “delicately probing” analysts to determine — without alarming them — what level of losses Enron could report without suffering a downgrade.

“You can’t ask, ‘How much can we charge without losing our credit rating?’” Glisan testified, according to the Chronicle. Glisan ultimately concluded that Enron could take no more than a billion dollar loss, though — in yet another potentially damaging exchange for Lay — Glisan also reportedly said Lay pushed him to see if credit analysts would accept a larger figure.

Glisan also testified that he and Lay avoided conference call questions about the value of water utility assets posed by analyst Richard Grubman, because they feared answering his question would again imperil the company’s credit rating. Glisan reportedly told the court that Grubman had arrived — via a “somewhat tortured” method — at approximately the correct impairment amount — $1 billion — for UK water utility Wessex Water. (Grubman is the same analyst that then-CEO Jeffrey Skilling famously swore at during a conference earlier in the year).

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