By Carrie Johnson
Washington Post Staff Writer
Thursday, April 20, 2006

HOUSTON, April 19 -- And, on the seventh day, he fought.

Former Enron Corp. chief executive Jeffrey K. Skilling displayed contempt for the prosecutors Wednesday in the third and final day of cross-examination in his fraud trial, completing for jurors the portrait of a complex man who refused to back down from his argument that Enron was felled by a market panic -- despite testimony from a parade of corporate insiders who pleaded guilty and offered evidence against him.

In seven days on the witness stand during which he was alternately proud, furious, depressed and sheepish, Skilling offered the jury his own view of his role, which he hopes will supplant years of vilification following Enron's December 2001 collapse into bankruptcy protection.

The self-assertive witness refused to concede ground and challenged the government at every opportunity Wednesday, creating tension in the packed courtroom. He disagreed with prosecutor Sean M. Berkowitz about nearly everything, such as the reasons Skilling left the company, the risks Enron took and the basis of stock sales he made.

After one such impasse, Skilling speculated aloud: "We're going to be here all day. I think we're on fundamentally different planes." Jurors sometimes smiled at each other as the witness and the prosecutor skirmished.

Skilling, 52, faces 28 fraud, conspiracy and insider-trading charges that could send him to prison for more than a decade if he is convicted. Prosecutors accuse him of leading a long-running scheme to inflate earnings and mislead investors about the health of the Houston energy trader. He and fellow defendant Kenneth L. Lay, likely to take the witness stand early next week, say no fraud occurred and that Enron was the victim of a market panic.

Experts say a defendant's decision to testify is often the single most decisive factor in a trial, particularly one that turns on state of mind.

Skilling underscored the issue Wednesday, when he told the jury that many of the government's 22 witnesses testified as to their "perceptions of what my intent was" but "frankly, I'm the only person who knows."

Earlier in the day, the prosecutor highlighted inconsistencies between accounts Skilling gave during the 12-week trial and sworn testimony from former Enron insiders who pleaded guilty. Berkowitz also tried to use Skilling's own words against him. The executive has noted with pride that he was one of few former Enron leaders to speak with Congress and securities regulators after the company's collapse.

Through his testimony, which will conclude Thursday morning, jurors got a glimpse of Skilling as a person -- in ways that both helped and hurt him.

Over four days of friendly questioning by lead defense lawyer Daniel M. Petrocelli last week, Skilling grew emotional as he discussed his love of the company and the time he failed to spend with his children while he nurtured Enron. He openly talked about his drinking and his inability to get out of bed as the company fell apart, perhaps baring his emotions more than any other executive who has faced trial in a wave of 1990s corporate scandals.

Skilling also spoke enthusiastically about his ideas for the business and cheerfully lectured jurors about arcane trading concepts. He showed detailed recollection of certain technical issues yet failed to recall key events, including a Sept. 6, 2001, stock-sale attempt, that form the basis of criminal charges against him. Prosecutors claim Skilling remembered what was convenient and forgot what was not. He said Wednesday in his own defense, "Your mind can only keep so many statistics," pointing out that he had given the wrong year one of his cars was made.

On cross-examination, Skilling displayed another side of his personality. Skilling had developed a reputation for bristling under criticism -- and that came across in full force Wednesday.

As Berkowitz read aloud from a March 2001 Fortune magazine article that questioned Enron's earnings growth and its prospects, Skilling interjected, "You chose the unfavorable one, right? Just curious."

He followed his own question, asking the prosecutor: "Are you entering this as truth or just as what people are saying?"

At that point, U.S. District Judge Simeon T. Lake III intervened with a comment for the witness. "I gave a long, thorough instruction last week. Apparently you don't remember. I hope the jury does."

The incident was one of several in which Skilling tried to wrest control of the proceeding, which led the prosecutor to restrict him to yes-or-no responses. They clashed repeatedly Wednesday over a method Enron used to express the risks of trading operations, risks that prosecutors argue were never properly disclosed to investors. Skilling said analysts "absolutely had those numbers," known as "value at risk."

After more than an hour of frustrating back-and-forth exchanges, Berkowitz moved on, playing a call from Skilling to employees of the investment firm Alliance Capital in August 2001. Alliance held nearly 20 million Enron shares at the time and bought 13 million more shortly before the company fell apart. Prosecutors used the call to demonstrate that the risk-measurement concept was not easy for many people to understand -- including investors and employees who lost retirement savings.

Government lawyers ended their questioning Wednesday where it all began: the reasons for Skilling's abrupt resignation, which triggered increased scrutiny of Enron by investors and analysts. Prosecutors argued Wednesday that he was considering other top jobs, including a chief executive post at Lucent Technologies Inc., after saying he had left for personal reasons, unaware Enron was on the verge of disaster.

That, too, drew Skilling's ire. He called the argument yet another "misrepresentation," as prosecutors declared they were finished with him.