Ex-Enron Treasurer: Skilling, Lay Lied

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http://news.yahoo.com/s/ap/enron_trial;_ylt=ApA8ssb5GJDtxXXzCaVAWGoDW7oF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

Ex-Enron Treasurer: Skilling, Lay Lied

By MICHAEL GRACZYK and KRISTEN HAYS, Associated Press Writers 1 hour, 55 minutes ago

HOUSTON - Enron Corp. founder Kenneth Lay worried in 2001 that the company's mounting financial problems would jeopardize its credit rating and inquired about managing its accounting to avoid a downgrade, a former Enron treasurer testified Wednesday.

Former Treasurer Ben Glisan Jr. testified that Lay assigned him to feel out credit-rating agencies about how large some required accounting writedowns could be without jeopardizing Enron's rating.

"That's backwards," Glisan told jurors Wednesday in the fraud and conspiracy trial of Lay and former Enron CEO Jeffrey Skilling. "What should occur is we should take the charges that we needed to take and then deal with the consequences."

Glisan said Enron, a reputed powerhouse, was actually weak and faced multibillion-dollar losses and writedowns on assets that either performed poorly or were overvalued.

But if credit analysts knew of such looming problems, they might downgrade Enron's investment-grade credit rating — which would alert Wall Street that the company had serious troubles. A downgrade would make it more expensive for Enron to borrow millions to support its trading operation and could force debt repayment when little cash was available.

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