The defense paints Andy Fastow as a liar, and has been challenging hiscredibility, Fastow testified that Enron founder Ken Lay was aware of thecompany's poor financial condition in 2001 when he gave upbeat reports toemployees and analysts. But Lay's attorney Mike Ramsey countered that byplaying tapes of Lay telling employees that some overseas assets weregenerating low returns.
The defense continued questioning the authenticity of a handwrittenagreement Fastow said he found in 2004. That's the list documenting theside deals Fastow had with former chief accountant Richard Causey.
The defense has said special purpose entities like LJM are legal, butFastow ran secret side deals without the knowledge of Lay and Skilling. Fastow admitted there's no paper trail connecting the deals with Skilling.
Former LJM employee Chris Loehr will answer government questions when thetrial resumes this morning, and whistleblower Sherron Watkins could be onthe stand this week.
Ed Mayberry, Houston Public Radio News.