NYT: Enron Ex-Treasurer Says Lay Endorsed Accounting [View All]

Enron Ex-Treasurer Says Lay Endorsed Accounting
By ALEXEI BARRIONUEVO and VIKAS BAJAJ
Published: March 22, 2006

HOUSTON, March 22 — A former Enron treasurer testified today that Kenneth L. Lay presided over meetings in which top executives discussed the energy company's precarious finances and endorsed the continued use of complex accounting arrangements because they made it possible for Enron to meet Wall Street's earnings expectations.

Ben F. Glisan Jr., the former treasurer, provided some of the strongest testimony against Mr. Lay heard by the jury so far, as the prosecution entered the home stretch of its case against Mr. Lay, Enron's former chairman, and Jeffrey K. Skilling, the company's former chief executive. The government expects to finish its case by the end of the month.

Corroborating previous testimony by several witnesses, Mr. Glisan detailed several meetings from the months leading up to the energy company's bankruptcy in late 2001, in which executives scrambled to shore up the company's shaky finances while Mr. Lay continued to publicly tout Enron as a stable and successful operation.

At one point, Mr. Glisan testified that Mr. Lay assigned him to "feel out" credit ratings analysts to see how big an accounting charge the company could take without risking a debt downgrade, a figure he said he determined was $1 billion.

"It was backwards; we should have taken the charges that we needed to take and deal with the consequences with the ratings agencies," said Mr. Glisan, who has served about half of a five-year prison sentence for falsifying Enron's financial results....

http://www.nytimes.com/2006/03/22/business/businessspecial3/22cnd-enron.html?hp&ex=1143090000&en=4ca6c06cb353526a&ei=5094&partner=homepage