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Skilling ends testimony, denies he cheated on taxes

Enron founder Lay takes stand in fraud trial on Monday

HOUSTON -- Enron Corp.'s former chief executive, Jeffrey Skilling, ended testimony in his fraud trial yesterday by denying a new government accusation: that he may have cheated on his taxes.

Skilling calmly said he did not recall backdating a $10,000 gift check to an ex-girlfriend to avoid paying taxes on it in 1998. He told jurors he has heard nothing from the Internal Revenue Service.

''I paid my taxes," he testified -- more than $66 million from 1997 through 2004.

His codefendant, Enron founder Kenneth Lay, takes the stand Monday.

Skilling repeatedly denied during 7.5 days of testimony that he lied to investors about Enron's financial strength or approved accounting tricks to meet earnings targets and impress Wall Street. The company spiraled into bankruptcy in December 2001.

Skilling, 52, acknowledged his anger at the government for pegging him as a liar and a crook, and often struggled to keep his temper in check when grilled by prosecutor Sean Berkowitz.

Skilling's lawyers have assailed most government witnesses for lacking hard evidence in accusing the ex-CEO of fraud. But Skilling's testimony has lacked notes, e-mails, or other tangible proof to corroborate his assertions that the witnesses lied or misconstrued things.

Brian Wice, a Houston defense attorney who has observed much of the trial, said the government threw no knockout punches. ''This is a case that turns on credibility," he said.

An exhausted Skilling said outside of court: ''You can never say everything you want to say. I feel I had a fair opportunity to explain a lot of the questions."

Lay, 64, praised his codefendant. ''He did great," Lay said.

Skilling is charged with 28 criminal counts of fraud, conspiracy, insider trading, and lying to auditors from 1999 through 2001. Lay faces six counts of fraud and conspiracy.

Berkowitz brought up the tax allegation during his second pass at cross-examining Skilling. The issue stemmed from one the federal prosecutor first raised on Tuesday regarding Skilling's investment in an ex-girlfriend's online photo-sharing company, which did business with Enron.

Neither issue is related to charges against Skilling, but Berkowitz used them to challenge the ex-CEO's honesty.

Skilling told jurors he invested $60,000 in the company; Berkowitz showed jurors he actually invested $180,000 in the company, and it did $450,000 in business with Enron.