Koenig, who had pled guilty to fraud, was called explain some of the complex criminal transactions he had participated in (and which Skilling probably had knowledge of).
Q: It has been suggested that you pled guilty but you aren't really guilty of anything. . . Do you agree with that?
A: That I wasn't guilty?
A: No. I wish I could agree with it. But I was guilty....
Q: Mr. Koenig, what is the purpose of Exhibit A?
A: Exhibit A is a factual statement that provides... a factual basis for my plea of guilty.
Q: And does that factual basis list out every lie or misleading statement that you made to investors while you worked at Enron?
Q: Now, when you entered into this plea of guilty, had you been informed that there was a substantial amount of incriminating evidence against you?
A: I knew there - nobody had to have the other evidence. I knew it myself.
Q: Other than what you personally thought in your own mind, did someone show you any incriminating e-mails that showed that you were guilty?
A: I reviewed my conduct for many years after I left Enron as I was defending myself in the civil cases. Yes, I was guilty of aiding and abetting securities fraud....I didn't plead guilty to one statement on this conference call. That's not petty or whatever you called it – thin?
BY MR. PETROCELLI: Thin.
A: I don't think it's thin or I wouldn't have pled guilty to it. You have three Q and A items there-
A: No. That's not-
Q: -cited there.
A: They're cited here, yes. I wished that was all I did.
Q: So, back to my question, then. You're still in the mode of protecting yourself, aren't you?
A: I don't know what you mean by "protecting" myself, but I don't feel that in the last three days I've protected myself in any way.
Q: What does it mean to say "the Department's assessment of the value of your assistance and your cooperation"?
A: The fullness. The – staying on the right track, not-not concentrating on little issues or avoiding the questions. I would put that in the value category.
Q: Might it also include how helpful you were to the cause of the Government?
Q: Are you sure of that?
A: I'm sure of that, because I don't know that I will, by all means and everything I say, help the Government....
Q: And at the time you pled guilty, how old were your three children?
A: Two of them. . .
[The witness pauses. He is offered a tissue to wipe his eyes, but declines the offer.]
Q: Would you like to take a break, sir?
THE COURT: Why don't we take about a ten-minute break?
THE WITNESS: I'm fine. I'm fine…
Q: Are you afraid, sir, as you sit here now? Do you have a fear of giving an answer that might alienate the Government because of the control they have over the rest of your life?
Q: You have no fear at all?
A: I'm past that....If I can answer your earlier question, my children, two are in college and one in high school.
Q: I appreciate that.
A: And entering into this guilty plea, it's not hard to tell them that. And I'm over the big fear.