The prosecution continues to pressure former Enron chief executive officer Jeffrey Skilling about the partnership deals known as the Raptors, and on Tuesday, the pressure began to show.
On Skilling’s second day of cross-examination, prosecutor Sean Berkowitz accused him of using the Raptors to hide losses, reported the Houston Chronicle, while Skilling replied that there was “nothing unusual” about the Raptor structures and that they were used simply to protect gains.
“They did not move off the balance sheet, they were always on the balance sheet, they were hedged on the balance sheet,” Skilling replied in animated fashion, according to the paper.
Asked about the huge losses that eventually befell a Raptor transaction called Avici, Skilling retorted, “Yeah, hindsight is a wonderful thing,” reported the Chronicle.
“You know that’s not true,” Berkowitz reportedly countered. The prosecution has charged that Skilling had advance knowledge, from then-treasurer Ben Glisan and others, that Avici stock was going to plummet.
“Mr. Berkowitz, this is not reasonable,” Skilling responded sharply, according to the newspaper. “How does anybody know if a price [is going to go] up or down?”
The prosecutor also went through portfolios that Enron used to assess risk, reported the Chronicle, in an effort to show that Skilling knew the assets were underperforming and that he made the kinds of decisions intended to hide losses using the Raptors.
Skilling reportedly admonished the prosecution for not looking at the full picture. “This is like looking at the baseball rankings and [saying], OK, let’s look at some of the bottom two teams. We need to look at some of the top teams as well.”
“Mr. Skilling, let’s not talk about baseball,” replied Berkowitz in a calm but stern manner, observed the Chronicle. The prosecutor reportedly went on to show that Skilling received monthly reports of underperforming assets and that he had ordered a risk analysis study to be done.