Skilling Faces Legal Risks With Testimony

Former Enron Corp. Chief Executive Jeffrey K. Skilling’s decision to testify before Congress a second time carries new risks of possible criminal charges against him, legal experts said.

Lawmakers on the Senate Commerce Committee will ask Skilling on Tuesday to explain what they say are contradictions between his testimony to a House panel on Feb. 7 and that of other Enron executives, who say he knew details of the partnerships that triggered the energy trader’s collapse.

“To testify a second time can compound the original danger,” said Robert Plotkin, a lawyer with Paul, Hastings, Janofsky & Walker who specializes in securities fraud cases. “He runs the risk of saying something contradictory to something he’s already testified about.”

The testimony comes as Congress is broadening Enron hearings to examine the role of Wall Street analysts who kept “buy” ratings on Enron while the company’s finances fell apart. Analysts from J.P. Morgan Chase & Co., Lehman Bros. Inc., Credit Suisse First Boston and Citigroup Inc. will testify before the Senate Government Affairs Committee on Wednesday.

Jeffrey McMahon, president and chief operating officer, and Sherron S. Watkins, a vice president, will testify at the same Senate Commerce Committee hearing where Skilling will appear. They’ve said he knew about the partnerships that helped hide $1 billion in losses while enriching senior executives who managed them.

Skilling, who resigned Aug. 14, three months before Enron filed the largest bankruptcy in history, denied wrongdoing and testified that he left oversight of the partnerships to others.