This Week at the Enron Trial: Skilling Grilled

It was nearly all former chief executive Jeffrey Skilling for a second straight week in the government's fraud and conspiracy trial against him and former Enron chairman Kenneth Lay.

After hearing from Skilling for much of the defense's first week of presentation, prosecutor Sean M. Berkowitz took the government's turn in questioning Skilling over how Enron handled its reserves, the legality of the complex financial structures that Enron used to move debt off its balance sheet, the profitability of the company's broadband services unit and delving into the minutia of internal business definitions at Enron in often combative exchanges.

The government says Skilling knew Enron wrongly dipped into reserves to pad its earnings when business units failed to meet income targets, but Skilling maintained that once a reserve was set aside, it was kept in a "lock box" and couldn't be tapped. Several prosecution witnesses have testified that they felt pressure from Skilling to use reserves to meet internal profit targets.

Lay is expected to begin testifying as early as Monday, following a re-direct of Skilling on Friday. Up to 10 other defense witnesses are slated for brief testimony between Skilling and Lay. Next up is Carol Baxter, the widow of former Enron vice chairman Cliff Baxter, who shot himself in January 2002.

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