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Witness: Skilling lied about finances

HOUSTON -- A former high-ranking Enron trading and retail energy executive testified yesterday that he, chief executive Jeffrey Skilling, and others lied about Enron's financial health as part of a conspiracy to defraud investors.

''As a management team, we did lie," David Delainey said, sticking to damaging testimony under cross-examination from Skilling lawyer Daniel Petrocelli in the fifth week of the fraud and conspiracy trial of Skilling and Enron founder Kenneth Lay. The defendants claim there was no fraud.

Yesterday, Delainey said, ''We had a very compelling story that we were telling and we weren't telling the complete truth.

''What was this Enron story? Is it a story about a criminal conspiracy?" Petrocelli demanded.

''Yes," Delainey replied.

''Is it a story about fraud?" Petrocelli asked.

''Yes," Delainey said.

Prosecutors contend Lay and Skilling repeatedly lied about Enron's financial health while knowing fraudulent accounting propped up the company before it spiraled into bankruptcy proceedings in December 2001.

Andrew Fastow, Enron's former chief financial officer who admitted he engineered schemes to hide company debt and inflate profits for years, will testify next week, prosecutors said. Fastow will make his first public statements about his admitted crimes at Enron, and his testimony could be devastating to his former bosses' insistence that they did nothing wrong and no fraud occurred at the company.

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