16 Aug

Conspiracy of Fools: Did Skilling Read Before He Signed?

While Enron and Dynegy executives were trying to work out the details of their pending merger, William McLucas, one of Enron’s outside lawyers began questioning Jeff Skilling about the Southampton partnership and LJM. These were two of the several entities that put large amounts of money into the pockets of Enron executives.

Skilling claimed he knew nothing about the fact that Andy Fastow, Enron’s former CFO, received $35 million from LJM in the prior two years. Fastow had told the Enron board of directors that Skilling had approved each deal done by LJM. Skilling denied it.The attorney brought out an approval sheet for an LJM deal named Margaux. The sheet had Skilling’s signature on it.

“You signed this one,” McLucas said. “There is a list of questions with answers, and you signed it.”

“Now, wait a minute,” Skilling shot back. “My signature doesn’t mean I’ve reviewed these questions independently and satisfied myself the answers are right.”

McLucas crossed his arms. “What does it mean, then?”

Skilling pointed at the signature page. “Right here, I saw Causey and Buy already signed,” he said. “The fact that they signed it was good enough for me to sign without reviewing the same facts again.”

So was Skilling just trying to get out of responsibility for that deal, or did he really not examine the terms of the deal before he approved it?