HOUSTON – As Enron’s business woes mounted in the summer and fall of 2001, the company top executives conspired to restrict write offs and embraced increased trading risks to retain its investment credit rating, a former high-ranking finance executive testified yesterday.

Ben Glisan Jr., the company’s former treasurer, alleged that more than $1 billion in write downs at Enron’s troubled telecommunications, retail energy, and international power businesses were vetoed by former Chairman Kenneth Lay and others. Mr. Lay feared a larger write down would trigger a credit-rating downgrade that would cripple its money-making trading business, he said.

Glisan pleaded guilty to conspiracy to commit wire and securities fraud and is serving a five-year prison sentence.He is testifying in Houston in the federal criminal conspiracy and fraud trial of Mr. Lay and former President Jeffrey Skilling under a grant of immunity from additional Enron crimes. Defense attorneys haven’t yet had a chance to question him.

Early in 2001, Mr. Skilling had estimated the value of several businesses had declined by as much as $5 billion but concluded the company’s finances were too fragile to support a write down of the total amount. Mr. Skilling resigned in August and Mr. Lay was told of the needed write-downs at management meetings that month.

Mr. Glisan told the jury that Enron was using financial engineering to manufacture earnings as several businesses struggled. Indeed, Enron executives describe a litany of woes at a September meeting attended by Mr. Lay. The conditions were so bad, one executive at the meeting said, “he was glad he didn’t have a gun or he would shoot himself,” he testified. Several executives proposed doing away with further “structured finance” transactions that had allowed the company to meet its earnings targets. But, he testified, “Mr. Lay said,’We rely on these; they are imperative to hit our numbers and we’re going to keep doing them.'”

Mr. Skilling earlier that year had advised Enron executives to de-emphasize the company’s reliance on natural gas and power trading in their conversations with Wall Street analysts to prop up its stock price. “Mr. Skilling noted the market doesn’t value trading companies as highly as other areas,” Glisan said. “It was important to articulate the company was a logistics company, and stay away form the term trading, or traders,” he said.

Despite telling investors that Enron’s earnings were tied to delivery of gas and power, Mr. Lay also went to the finance committee of Enron’s board of directors in August to propose an increase in the risks its trading unit could take, Glisan said. Herbert Winokur, the finance committee chairman, balked at the risk proposal, he said. But Mr. Lay countered that “were the finance committee not able to increase risk limit, we might not reach our earnings targets … and might have to issue a warning” on earnings, Glisan testified.