Lawyer shakes ex-treasurer's tale

HOUSTON -- The government's last major witness in the Enron fraud and conspiracy trial backpedaled yesterday when grilled about his assertion that chief executive Jeffrey Skilling approved the use of a fraudulent financial structure.

Skilling lawyer Daniel Petrocelli even challenged ex-Enron treasurer Ben Glisan Jr. on whether the structure was fraudulent. The defense says the only fraud at Enron was a few employee's skimming money for themselves.

Wednesday, Glisan testified that when he explained the structure known as a Raptor at a March 2000 meeting of the Enron board's finance committee, Skilling ''noted that this is not a deal that he would recommend except for the fact that it allowed him to circumvent the accounting rules."

But Petrocelli noted yesterday that Glisan told a grand jury in March 2004 that Skilling said at that meeting that he wouldn't enter into the Raptor structure ''but for accounting rules" that required companies to take losses on assets that declined in value unless they were hedged by such structures, Petrocelli noted.

''He didn't say violated, circumvented, or that anything was improper, did he?" Petrocelli asked.

''That's true," Glisan replied.

Glisan also told that grand jury that at the time of the presentation, he didn't think, nor did he assert, that the accounting was ''just flat wrong."

''You didn't think the accounting was wrong, did you?" Petrocelli asked.

''In the end, I did," Glisan replied.

''At the time?" Petrocelli pressed.

''At the time, I worried that it was. I didn't think it would withstand scrutiny."

But Glisan acknowledged he didn't tell Skilling or directors.

Glisan also said he could not recall any notes, e-mails, or other tangible proof that would support his testimony tying Skilling to fraud and conspiracy at the failed energy giant. He relied only on his memory of conversations to support his claims that Skilling knew of shady goings-on.