The former head of Enron Corp.'s energy services retail unit took the stand in Houston, testifying that former chief executive Jeffrey Skilling had to have known he was committing a crime in fudging the facts surrounding the company's accounting.
Five weeks into the government's fraud and conspiracy trial against former Enron chairman Kenneth Lay and Skilling, retail head David W. Delainey testified for the government, providing alleged first-hand knowledge of when Enron's deception of its investors began to become a conspiracy.
Delainey provided details of the shift of more than $200 million in retail trading losses nearly five years ago, refusing to say the move was made for efficiency reasons. Delainey admitted that he lied about the real reason for the reorganization of the retail unit to his employees, the Enron board and, later, to federal investigators.
He testified that former chief accounting officer Richard Causey came up with the original plan to shift the problem contracts to Enron's wholesale energy division, but that when Delainey expressed his concerns about such a move to a group of executives, including Skilling, everyone agreed to the changes. Delainey also testified that the move had been backdated.
Delainey has pleaded guilty to insider trading and faces up to 10 years in prison.
Lawyers for Lay and Skilling have said that the men were not involved in any fraud and that the collapse of Enron in December 2001 was caused by a market panic.Enron's former chief financial officer, Andew Fastow, could begin testifying as early as Monday.
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