As government investigators look for the roots of Enron's demise, the Enron chief executive who quit just months before the company collapsed broke his silence on Friday to deny any responsibility or wrongdoing.
Jeffrey K. Skilling, who resigned as chief executive in August after a decade at the company, said in an interview that he had been stunned by Enron's subsequent descent and by revelations that his former chief financial officer and right-hand man made more than US$30 million from dealings with investment partnerships related to the company.
Skilling said that he had never invested in such partnerships and disputed assertions by people close to Enron that he had been counseled against entering into them. But he said that the partnerships, now the subject of government investigations, were the idea of the former chief financial officer, Andrew S. Fastow.
While shareholders and employees who suffered big losses have filed suits against Enron, Skilling sold some of his holdings shortly before the collapse. Skilling disclosed that he sold about 500,000 shares of Enron stock on Sept. 17 -- when the US stock markets reopened after the terrorist attacks. Based on trading that day, the sale would have brought about US$15 million. That was his only sale of Enron stock after his resignation, he said. Earlier in the year, Security and Exchange Commission filings show, he took in US$15.6 million by selling 240,000 shares. Regulatory filings indicate that he still owns more than 600,000 shares, and many options.
"We're all trying to figure out what happened," Skilling said. "This was a tragedy. I had no idea the company was in anything but excellent shape."
In October, he offered to return to Enron to help the company weather its growing crisis, he said. While the chairman, Kenneth L. Lay, liked the idea, Skilling said, it was rejected because of concerns that "the press might not understand it and it would add to the confusion." Soon after, Enron became the biggest corporate bankruptcy ever.
Based on a conversation with a senior Enron executive after he quit, Skilling said that the company lost out on the opportunity to obtain US$3.5 billion to US$4 billion in financing when it was most needed because of provisions unusual in such contracts.
Skilling, a former consultant at McKinsey & Co, joined Enron in 1990 and helped transform it into the largest energy-trading company in the world. Until recently, Enron dominated the sale and marketing of natural gas, electricity and other commodities. It became a focal point in the California energy crisis, and its close ties to the Bush administration led to criticism that it had helped shape the administration's energy policy.
But the company began to unravel in October as it disclosed losses and reductions in equity partly because of dealings with investment partnerships involving Fastow.
The SEC soon began a formal investigation, and last month Enron said it had overstated almost US$600 million in profits over the last five years. A rival Houston energy trader, Dynegy Inc, agreed on Nov. 9 to rescue Enron but called off the merger later that month. Enron collapsed in the face of looming debt payments and the refusal of many energy-trading customers to continue to do business with it.
Skilling, who has spent two days giving sworn testimony to the SEC, said he never exercised his Fifth Amendment right against self-incrimination before investigators. He also said he did not believe he would face sanction by the SEC or criminal charges. "I didn't do anything wrong," he said.
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