Ex-Enron treasurer: Lay, Skilling misled Wall Street

HOUSTON -- Enron Corp. founder Kenneth Lay worried in 2001 that the company's mounting financial problems would jeopardize its credit rating and inquired about managing its accounting to avoid a downgrade, a former Enron treasurer testified yesterday.

Testimony by former treasurer Ben Glisan Jr. began Tuesday and has outlined what he said were public fabrications by Lay and former chief executive Jeffrey Skilling about the health of the company, struck a nerve with Lay.

During a break in Glisan's testimony yesterday afternoon, a visibly annoyed Lay told reporters, ''I've never heard so many lies in one day in my whole life." Lay's wife, Linda, nodded her head and added, ''Unbelievable."

Glisan testified that Lay assigned him to feel out credit-rating agencies about how large some required accounting write-downs could be without jeopardizing Enron's rating.

''That's backwards," Glisan told jurors in the fraud and conspiracy trial of Lay and Skilling. ''What should occur is we should take the charges that we needed to take and then deal with the consequences."

Glisan also said Lay and Skilling misled Wall Street in 2001 about the nature of Enron's business, describing it as a ''logistics" company rather than as an energy trader.

Glisan said ''logistics" indicated Enron made money by delivering commodities and could sustain its growth. An energy trader is vulnerable to market volatility and therefore a more risky investment, which Glisan said could translate into a lower credit rating and stock price.