Enron's Skilling Answers Markey at Hearing; Eyes Roll — Transcript

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1. 0:00time of the gentleman has expired
2. 0:01Chairman recognizes gentleman from
3. 0:03massachusetts market for five minutes
4. 0:05thank you Thank You mr. chairman what
5. 0:10day mr. skilling did you leave Enron
6. 0:12August 14 August 14
7. 0:16Sharon Watkins wrote a memo on August 14
8. 0:20to Ken Lay she said skilling is
9. 0:25resigning now for personal reasons but I
10. 0:28think he wasn't having fun look down the
11. 0:32road and knew this stuff was unfixable
12. 0:35and would rather abandon ship now than
13. 0:39resign in shame
14. 0:41two years later same day you're
15. 0:46resigning this woman down deep in the
16. 0:51company knows about all these problems
17. 0:54everything that's going on and you're
18. 0:59sitting here is the CEO saying you just
19. 1:01decided on the same day you're walking
20. 1:02away and you really don't know much
21. 1:03about any of the things that any of the
22. 1:07members here are asking about here today
23. 1:11was it miss Watkins really correct that
24. 1:15you were abandoning ship on a day that
25. 1:19you already knew as she did that this
26. 1:23company had deep problems that you had
27. 1:26already identified them and you were
28. 1:28just walking away without wanting
29. 1:31investors without wanting employees
30. 1:33without telling everyone what the real
31. 1:36reason was that you were quitting Enron
32. 1:41congressman I I could just say it again
33. 1:44on a date I left I absolutely
34. 1:48unequivocally thought the company was in
35. 1:50good shape
36. 1:52well it's hard to believe this is going
37. 1:56given your reputation for competence for
38. 1:59hands-on knowledge and the fact that
39. 2:02there was plenty of evidence that other
40. 2:03people knew all throughout the company
41. 2:06that there was a big problem not just
42. 2:12one big problem but
43. 2:13both problems now mrs. Kelly according
44. 2:17to the Watkins memo mr. McMahon and mr.
45. 2:21McMahon's testimony and the powers
46. 2:23committee report mr. McMahon approached
47. 2:27you with serious concerns about the
48. 2:29inherent conflicts of interest in ljm is
49. 2:33that true again my recollection of the
50. 2:37discussion that I had with Jeff is that
51. 2:39he was concerned that because there was
52. 2:43a conflict of interest with Andy that in
53. 2:46discussions that they had that that
54. 2:48would somehow hurt his compensation so
55. 2:51did he lay out specific steps he thought
56. 2:53should be taken to address these
57. 2:55conflicts I don't recall you don't
58. 2:57recall now according to both the Watkins
59. 3:00memo and the powers report you took no
60. 3:04action after McMahon warned you even
61. 3:08after being told that fast dial was
62. 3:11pressuring Enron employees who were
63. 3:14negotiating with ljm is that true in the
64. 3:19discussion again as I recall on that day
65. 3:22when Jeff came in to see me he said he
66. 3:27was concerned about his compensation and
67. 3:29I said Jeff you know how compensation is
68. 3:33determined around here and maybe maybe
69. 3:35you all don't know this but our
70. 3:36compensation system was based on
71. 3:38something called the PRC performance
72. 3:41review committee there were typically 20
73. 3:43to 24 people on the performance review
74. 3:45committee Geoff's concern was that Andy
75. 3:48was on that performance review committee
76. 3:49and might influence his compensation
77. 3:51what I said to Jeff is Jeff if you
78. 3:57negotiate hard on behalf of Enron and if
79. 4:01you take a baseball bat
80. 4:02- Andy fast down in a negotiation that
81. 4:05benefits and Ron corporation 23 of the
82. 4:0924 people on that committee will be
83. 4:11cheering for you okay three days later
84. 4:13you reassign mr. McMahon
85. 4:18now why did you reassigned him well
86. 4:21first I'll say there was absolutely no
87. 4:23connection no connection he's warning
88. 4:26you about conflicts of interest you
89. 4:28don't take any action three days later
90. 4:30he gets reassigned there's no connection
91. 4:32there is absolutely no resign on August
92. 4:3414th Sharon Watkins writes a memo on
93. 4:36August 14th there's no connection
94. 4:39I think Sharon wrote the memo in part
95. 4:42because I did resign I might be at all
96. 4:44surprised that is that if that's what
97. 4:46triggered it she certainly didn't
98. 4:47confide her concerns with me but as far
99. 4:50as the relationship between Jeff McMahon
100. 4:54moving from the Finance Group into the
101. 4:57industrial products group there was no
102. 4:59connection whatsoever it was a huge
103. 5:01promotion for Jeff huge promotion not
104. 5:03viewed as such it has expired chair
105. 5:06recognizes Jenna from California mr.
106. 5:08Waxman for five minutes who acts would
107. 5:11you care to inquire five minutes sir