Direct Examination by Hueston:

Q: [Question concerning a kickback scheme]. .. And those gifts came in the form of checks?

A: Yes.

Q: Checks written to your wife, yes?

A: Yes.

Q: And your sons?

A: Yes.

Q: And yourself?

A: Yes.

Q: Take a look at Exhibits 7621 and 22. Do you have the first one there? And then 22, 7639, 7625. Are those examples of some of the checks ... you asked to be written to disguise those RADR proceeds?

A: Yes.

Q: Mr. Fastow, what is this?

A: A check from Mr. Dodson to my son.

Q: And what was this, in reality?

A: Payment of proceeds from the RADR transaction.

Q: What's this?

A: Check to my wife.

Q: What was this, in reality?

A: RADR proceeds.

Q: 7639, what's this?

A: Check to me, RADR proceeds.

Q: 7625, what's that?

A: Check to my son, RADR proceeds.

Q: There were other checks like that, too; correct?

A: Yes.

Q: Why did you involve your wife and your children like this?

A: I shouldn't have. It was the wrong thing to do. It was a – I thought it was a way to get the RADR proceeds back to us.. . .

Q: Mr. Fastow, you involved [your wife] in one of your schemes, right?

A: Yes.

Q: And because of your efforts, you caused her to go to jail. Is that right?

A: Yes.

Cross-examination by Petrocelli:

Q: You want the jury to believe that Mr. Skilling is consumed by greed as you are, right?

A: I didn't say that, sir. You did.

Q: I asked you. It's a question. Answer it.

A: My answer to that question is I spent a lot of time up here already saying that I stole from Enron. I did steal from Enron. We stole from Enron. That was why it was difficult for me when you posed your question to answer directly.

Q: Who's the "we"?

A: Myself and other members of senior management of Enron.

Q: Did they steal that 120 million?

A: No. They stole in different ways related to this 120 million.

Q: Now, you say, "They stole in different ways," other members of senior management. What you're saying is that other members of senior management committed fraud to make their stock go up, then they would sell their stock and get away with the booty that way. That's what you're suggesting, right?

A: Are you asking me?

Q: I'm asking you.

A: What I'm saying is when you misrepresent the nature of your company, when you artificially inflate earnings, when you improperly hide losses, when you do things like this to cause your stock price to go up so you can sell your stock to cause yourself to make earning targets, that otherwise you'd be unable to make so you get high salaries and bonuses, that is stealing.

Q: Okay.

Re-direct examination by Hueston:

Q: You've been asked about stealing from the house. Does the house include the investors at Enron?

A: Yes, sir.

Q: How does the manipulation of Enron's financials equate to stealing from that house?

A: Well –

MR. RAMSEY: Objection. That's asking him to speculate on a theory of law, rather than asking him facts, and I object to that.

MR. HUESTON: Your Honor, he has not been given a chance to explain in cross-examination about that full gamut of stealing, and I think he deserves an opportunity to do so now.

THE COURT: Overruled.

BY MR. HUESTON:

Q: You can answer.

A: . . . when management misrepresents the nature of the company, inflates the earnings, minimizes the losses, does various things to mislead investors into giving that company their money, and then, in turn, takes that money in the form of bonuses, salaries and cashing in stock options at higher levels, all at higher levels than they might otherwise be able to, I believe I did that, and that's stealing. And I believe that senior management of Enron contributed to that misrepresentation and those actions.