Jurors Tuesday watched video snippets of former Enron Corp. Chief Executive Jeffrey K. Skilling painting a rosy picture of the company's broadband business to pleased Wall Street analysts more than five years ago.
But Skilling's remarks were carefully crafted to alternate between telling analysts what Enron's broadband network could do at the time and what it could do in the future.
That distinction could make a big difference in his trial in January, as well as for the five defendants now on trial on charges of conspiracy and fraud. The five are accused of lying to Wall Street and investors about the capabilities of Enron's broadband network to boost the company's stock.
The government showed the videos to corroborate a contention by Kenneth Rice, former head of the broadband unit, that he, Skilling and four of the defendants lied about the network's capabilities at a 2000 analyst conference.
Rice, a key prosecution witness who pleaded guilty to securities fraud last year, said the executives knew the network wasn't up and running, nor could it perform certain tasks that would differentiate it from competitors, such as allowing customers to reserve bandwidth before using it.
Rice said that he, Skilling, former broadband co-CEO Joseph Hirko and others touted it as being ready to enter the then-competitive broadband market.
Rice said executives knew analysts might question Enron's venture into broadband when the company was known for energy trading and pipelines.
"Mr. Skilling liked to address issues head-on," Rice testified. "We addressed that concern by lying about the capabilities we already had on our network."
In the videos, Skilling used such phrases as "we have the potential for" and "We're real optimistic about the outlook for this business" and "Enron has already established the superior broadband delivery network."