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CNN Live At Daybreak

Skilling And Watkins to Testify Again Today

Aired February 26, 2002 - 06:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: After telling their story to a House investigative panel, two top Enron executives appear before the Senate Commerce Committee this morning. Vice President Sherron Watkins spoke out about shady financial dealings months before the company went bankrupt, and former CEO Jeffrey Skilling testified he believed those transactions were correct.

Three hours from now the Senate Consumer Affairs Subcommittee will begin taking a look at that Enron collapse and it should be interesting. That's because former Enron CEO Jeffrey Skilling will be getting another grilling and in the room with him the Enron VP who said she told him to come clean.

CNN's Allan Dodds Frank has this preview.

(BEGIN VIDEOTAPE)

ALLAN DODDS FRANK, CNN CORRESPONDENT: Smooth and confident almost to the point of arrogance, former Enron CEO Jeffrey Skilling showed no fear, only a failure of memory during his first appearance.

JEFFREY SKILLING, FORMER CEO, ENRON: All I can say is on October -- or August 14, the date that I left the company, I believed that the company's financials statements were an accurate reflection of its financial condition.

FRANK: Despite his reputation as a control freak who knew the key details of Enron's critical dealings, Skilling testified he could not remember a Board of Directors' discussion about a partnership set up by Chief Financial Officer Andrew Fastow.

UNIDENTIFIED MALE: You never heard Mr. Fastow say that you would approve all these transactions?

SKILLING: I don't recall.

FRANK: In fact Skilling recalled little about Enron's special partnerships.

SKILLING: While I was at Enron, I was not aware of any financial arrangements designed to conceal liabilities or inflate profitability.

FRANK: But a week later, Enron Vice President Sherron Watkins challenged Skilling. UNIDENTIFIED MALE: Do you believe that he knew the actual financial condition of the company -- Mr. Skilling that is?

SHERRON WATKINS, FORMER ENRON EXECUTIVE: Yes I do.

FRANK: An exchange about Skilling's knowledge of a partnership called Raptor, one of Enron's special purpose entities.

REP. EDWARD MARKEY (D), MASSACHUSETTS: In your opinion then, at the very top of the company, these men were well briefed with regard to what was going on inside of these special purpose entities.

WATKINS: It would be my opinion that Mr. Skilling would be very well briefed about these transactions.

FRANK: Jeffrey McMahon, another critic of former CFO Andrew Fastow has survived to become president of Enron. He also will testify again.

Earlier McMahon said he had gone to Skilling to complain about Fastow's handling of the partnerships, but Skilling then testified that he recalled little about McMahon's concerns other than he was worried about how much he would be paid if he complained.

Allan Dodds Frank, CNN Financial News, New York.

(END VIDEOTAPE)

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