Associated Press Former Enron Chief Executive Officer Jeffrey Skilling testifies about Enron on Capitol Hill yesterday, before the Senate Commerce Committee hearing. Skilling told senators "I didn't lie to Congress or anyone else" in denying he was aware of the company's precarious finances or its use of complex partnerships to hide debt.

WASHINGTON - Former Enron chief executive Jeffrey Skilling told senators yesterday, "I didn't lie to Congress or anyone else" in denying he was aware of the company's precarious finances or its use of complex partnerships to hide debt.

Addressing skeptical lawmakers, Skilling also said, "I never duped Ken Lay," disputing previous statements by Sherron Watkins, a company vice president who said Skilling had manipulated Enron's former chairman.

"I heard Ms. Watkins testify as to her opinion," Skilling said. "I have no idea what the basis was for this opinion."

Watkins, who appeared with Skilling, was more critical of Lay's role than she had been in her Feb. 14 testimony to another congressional panel. She told the Senate Commerce Committee yesterday she was "incredibly frustrated" with Lay's inaction after she warned him in August of potentially serious accounting problems involving the partnerships.

"I believe that Enron had a brief window to salvage itself this past fall and we missed that opportunity because of Mr. Lay's failure to recognize or accept that the company had manipulated its financial statements," Watkins said.

Skilling became more self-assured, and almost cocky, as the hearing went on, at one point wagging his finger at Sen. Ron Wyden, D-Ore., and telling him "back up, back up," in reading a document, and lecturing senators about the complex financial instruments called derivatives.

"If I were in charge of the world," he began a sentence recommending to senators what remedies they might consider to prevent another Enron-style catastrophe.

Skilling repeatedly said, "I'm not an accountant" when asked about Watkins' warnings to Lay.

Watkins testified she was afraid to take her concerns to Skilling because he might fire her. She said she finds it "hard to believe that Mr. Skilling was not aware that something was amiss."

Jeffrey McMahon, Enron's current president and chief operating officer, told the senators that Watkins' warnings "were concerning to me and I encouraged her, as others did, to see Mr. Lay about it."

Sen. Byron Dorgan, D-N.D., whose Commerce subcommittee is investigating Enron's collapse, told Skilling that some of his statements were "unbelievable."

He asked Skilling about the $66 million in Enron stock he sold between February 1999 and June 2001, contrasting it with the retirement savings of Enron employees that were wiped out as the stock plunged last fall. The employees' and retirees' 401(k) accounts were loaded with Enron stock.

"You still have most of your $66 million; that family's life savings is wiped out," Dorgan told Skilling, referring to a family in North Dakota that told him it lost nearly all its $330,000.

Watkins said she believed that former chief financial officer Andrew Fastow "would not have put his hands in the Enron cookie jar" without Skilling's approval. Fastow personally made more than $30 million from running the partnerships.

Skilling said, "I relied on our accountants," when asked about Watkins' warnings that Enron stock was improperly being used as the foundation of the web of partnerships that eventually brought the company down.

"I have nothing to hide," Skilling said, explaining why he had decided to testify rather than take the Fifth Amendment like "other innocents" called before congressional committees.

At the same time, he cautioned the committee that "the framers of the Bill of Rights are watching."

"The entire management and board of Enron has been labeled everything from hucksters to criminals with a complete disregard for facts and evidence assembled," he said. "These untruths shatter lives, and they do nothing to advance the public understanding of what happened at Enron."

Skilling sat without expression, listening attentively, as members of the committee opened the hearing by denouncing Enron's conduct and citing huge losses to public pension funds in their states. At the witness table with their attorneys were Watkins, Skilling and McMahon.

"Mr. Skilling, if you plan to tell this committee that you did not understand Enron's true financial condition, then you will need to explain why, why you failed to understand things that any diligent chief executive officer would have understood," said Sen. Jean Carnahan, D-Mo.

Sen. Peter Fitzgerald, R-Ill., told Skilling there is a chess game going. "Our challenge is to find a way to check every single one of the moves you made on that Enron board," he said.

"I do, however, approach your testimony with some skepticism," Fitzgerald said.

Skilling, Watkins and McMahon testified, separately and under oath, this month before a House investigative panel. Other top Enron executives, including Lay, have invoked their Fifth Amendment rights against self-incrimination and refused to testify.

Lay told Enron employees at a meeting Oct. 23 that the partnerships were a mistake, but he did not blame Fastow, who ran them, a videotape made public Monday by Rep. Henry Waxman, D-Calif., shows. The company had recently disclosed a third-quarter loss of more than $600 million and federal regulators had opened an inquiry into its accounting.

"I and the board are also sure that Andy has operated in the most ethical and appropriate manner possible," Lay is seen saying on the tape. The next day, Fastow was fired.

Watkins told the House Energy and Commerce panel Feb. 14 that she believed Skilling and Fastow - along with Enron's auditing firm, Arthur Andersen LLP, and outside legal advisers - "did dupe Ken Lay and the board."

The Justice Department and the Securities and Exchange Commission are investigating Enron and the role of Andersen, which has admitted its employees destroyed massive numbers of documents related to Enron.