Enron's Skilling Answers Markey at Hearing; Eyes Roll

[0:00] Time of the gentleman has expired. [0:02] Chairman recognizes the gentleman from Massachusetts, Mr. Markey, for five minutes. [0:06] Thank you, Mr. President. [0:08] Thank you, Mr. Chairman. [0:10] What day, Mr. Skilling, did you leave Enron? [0:12] August 14th. [0:14] August 14th. [0:16] Sharon Watkins wrote a memo on August 14th to Ken Lay. [0:21] She said, Skilling is resigning now for personal reasons, but I think he wasn't having fun. [0:31] Looked down the road and knew this stuff was unfixable and would rather abandon ship now than resign in shame two years later. [0:43] Same day you're resigning. [0:49] This woman down deep in the company knows about all these problems, everything that's going on. [0:56] And you're sitting here as the CEO saying you just decided on the same day you're walking away and you really don't know much about any of the things that any of the members here are asking about here. [1:09] Today, wasn't Ms. Rockins really correct that you were abandoning ship on a day that you already knew, as she did, that this company had deep problems, that you had already identified them, and you were just walking away without wanting investors, without wanting employees, without telling everyone what the real reason was that you were quitting Enron. [1:39] Congressman, I can just say it again, on the date I left, I absolutely unequivocally thought the company was in good shape. [1:51] Well, it's hard to believe, Mr. Skilling, given your reputation for competence, for hands-on knowledge, and the fact that there was plenty of evidence that other people knew all throughout the company that there was a big problem. [2:11] Not just one big problem, but multiple problems. [2:14] Now, Mr. Skilling, according to the Watkins memo, Mr. McMahon and Mr. McMahon's testimony, and the Powers Committee report, Mr. McMahon approached you with serious concerns about the inherent conflicts of interest in LJM. [2:32] Is that true? [2:36] Again, my recollection of the discussion that I had with Jeff is that he was concerned that because there was a conflict of interest with Andy, that in discussions that they had, that that would somehow hurt his compensation. [2:50] So, did he lay out specific steps he thought should be taken to address these conflicts? [2:56] I don't recall. [2:57] You don't recall. [2:57] Now, according to both the Watkins memo and the Powers report, you took no action after McMahon warned you, even after being told that Fastow was pressuring Enron employees who were negotiating with LJM. [3:17] Is that true? [3:18] In the discussion, again, as I recall on that day, when Jeff came in to see me, he said he was concerned about his compensation. [3:29] And I said, Jeff, you know how compensation is determined around here, and maybe you all don't know this, but our compensation system was based on something called the PRC, Performance Review Committee. [3:41] There were typically 20 to 24 people on the Performance Review Committee. [3:45] Jeff's concern was that Andy was on that Performance Review Committee and might influence his compensation. [3:52] What I said to Jeff is, Jeff, if you negotiate hard on behalf of Enron, and if you take a baseball bat to Andy Fastow in a negotiation that benefits Enron Corporation, 23 of the 24 people on that committee will be cheering for you. [4:12] Okay. Three days later, you reassigned Mr. McMahon. Now, why did you reassign him? [4:21] Well, first, I'll say there was absolutely no connection. No connection. [4:25] He's warning you about conflicts of interest. You don't take any action. Three days later, he gets reassigned. There's no connection. [4:32] There is absolutely no connection. [4:34] You resigned on August 14th. Sharon Watkins writes a memo on August 14th. There's no connection. [4:38] I think Sharon wrote the memo in part because I did resign. I wouldn't be at all surprised if that's what triggered it. She certainly didn't confide her concerns with me. But as far as the relationship between Jeff McMahon moving from the finance group into the industrial products group, there was no connection whatsoever. It was a huge promotion for Jeff. [5:02] Huge promotion. Not viewed as such. [5:05] The amendment has expired. The chair recognizes the gentleman from California, Mr. Waxman, for five minutes. [5:10] Mr. Waxman, do you care to inquire? [5:13] Five minutes, sir.