Joe Nocera on Jeffrey Skilling

Nocera writes:

Mr. Skilling, for the Defense - New York Times: In the world according to Jeffrey Skilling, Enron was brought down by two things: the revelation that Mr. Fastow was using his partnerships to make millions while also skimming from the company -- actions Mr. Skilling contends he knew nothing about.... And secondly, he says, Enron was done in by a handful of short sellers, who organized a conspiracy to attack the stock. (Gee, where have we heard that before?)

Well, what did you expect him to say?.... For most of the time on the witness stand, Mr. Skilling seemed smaller than life. He often wore a timid, tentative facial expression, a little like a third grader hoping not to be reprimanded by the teacher. But at least once a day he would have momentary meltdowns, and all the bitterness, sarcasm and self-pity would creep to the surface -- only to be damped back down by Mr. Petrocelli. In the course of answering a question about Mr. Fastow's crimes, for instance, Mr. Skilling took an unprompted swipe at the F.B.I. -- an incredibly foolhardy thing to do in front of a jury. When you're on the witness stand, fighting for your life, there is nothing more important than being disciplined in what you say and how you act....

Again and again, I found myself astounded listening to him describe Enron's business practices. He wants to bring in an outside C.E.O. to run Enron's new (and ill-fated) broadband business, but as soon as his buddy Ken Rice says he'll quit if that happens, Mr. Skilling folds like a cheap suit. Instead, he gives the job to the utterly unqualified Mr. Rice.... Mr. Fastow approaches him about setting up a partnership to do business with Enron. He blithely tells Mr. Fastow to work something up and bring it to him -- as if this extraordinary concept, so filled with conflicts and so easily abused -- is no big deal. He has a budget meeting with Lou L. Pai, the head of a poorly performing division called Enron Energy Services. The previous year, the division lost $69 million. Mr. Pai is projecting $50 million in profits for the next year, but Mr. Skilling thinks he's being "sandbagged," and tells Mr. Pai he wants $100 million. Why? Not because he knows anything about how the business is actually performing....

In the many detailed discussions about all the deals Enron did with Mr. Fastow's partnerships this last week, one thing usually was left out. Rarely did Mr. Skilling try to explain their underlying economic rationale. He acted instead as if Enron's dealings with those partnerships were as common as a thing could be, so ordinary they barely needed explaining. But of course that wasn't remotely true. What was extraordinary about those deals was they had no underlying economic purpose. They only had an accounting purpose. They existed to disguise the truth. If Mr. Skilling understands that fact, then he's a crook. If he doesn't, he's a fool. Either way, he should never have been in charge of Enron...

What I don't understand is how "short sellers" can destroy a company. As long as it has assets in excess of its liabilities, and is making money, where does the problem come from?