Former Enron Corp. treasurer Ben Glisan Jr. remained steady in his last day of testimony Monday, as defense lawyers for Enron founder Kenneth Lay and ex-CEO Jeffrey Skilling attempted to distance their clients from any wrongdoing.
In his cross-examination of Glisan, Lay lawyer Bruce Collins continued a defense theme that it was a “run on the bank” instead of criminal fraud and conspiracy by Lay that led to Enron’s collapse. Glisan had earlier testified that he told Lay about the company’s dire condition in October 2001, and he said Lay appeared nonresponsive. However, Glisan, who kept copious notes from many of his meetings with Lay and with Skilling, acknowledged he had no proof of his conversations with Lay about the company’s true financial picture.
Collins showed Glisan the minutes from a board of directors meeting in early October 2001, which indicated Glisan told directors — including Lay — that Enron had immediate access to $1.5 billion in cash from reserves or from its banks, and more money was “under consideration by the company.” In minutes taken by then-corporate secretary Paula Rieker, Glisan was quoted as telling the board, “Company on target to meet year-end goals.” In a meeting later that month, Glisan also is quoted as saying the company’s financial health was sound.
“The minutes reflect that, but I don’t think that’s a complete and accurate assessment,” Glisan told jurors after reviewing the evidence. Rieker’s “notes might not be complete,” he said. Glisan, the last major witness expected to be called by the prosecution, was expected to be returned to his minimum security prison in Beaumont, TX after testifying.
Glenn Ray, who was a broker for Charles Schwab, also testified Monday about Skilling’s attempt to sell nearly half of his Enron stock on Sept. 6, 2001. The prosecution played a tape recording of Skilling’s phone conversation with Ray, which concerned a proposed sale of 200,000 shares. Ray thought the order was unusual, he told the jury.
Under Schwab compliance rules, Ray couldn’t complete the sale because Skilling was still listed as an Enron officer. Skilling had resigned from Enron in August 2001. On Sept. 7, 2001, Skilling called Ray again and said he wanted to sell 500,000 shares of Enron stock. About 109,000 shares were sold, but the remainder of the sale was blocked because Skilling was still listed as an Enron officer. When the entire sale was not completed, Ray testified that Skilling called him and told him Enron’s attorney said he could sell the stock as long as he didn’t have any material information about the company.
“That’s a decision that I have to make,” Skilling is heard saying on the tape. “I’m worried about the timing on this thing…It’s going to cost me money if the market goes down to cover their ass,” he said, referring to the compliance requirements. “If this is a ‘cover-your-ass,’ and it costs me a lot of money, I’m not going to be happy about it. I’m worried. The market is dropping now.”
Ray testified he was able to reinstate the transaction and complete the entire share sale. The letter from Enron to Schwab was received Sept. 10, 2001.
The prosecution then presented Skilling’s testimony to the Securities and Exchange Commission (SEC) in 2002, when it was investigating possible insider trading by Skilling. “There was no other reason other than Sept. 11 that I sold the stock,” Skilling told the SEC.
The prosecution is expected to wrap up its case by mid-week. When the defense presents its case, both Skilling and Lay will testify, according to their lawyers.
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