HOUSTON (CNNMoney.com) - Former Enron CEO Jeff Skilling's lawyer was on damage control Wednesday, poking holes in a witness' testimony that linked Skilling to accounting fraud at the failed company.

The lawyer, Daniel Petrocelli, grilled Enron's former head of retail energy trading, David Delainey, over his honesty, trustworthiness, and the logic of his story and tried to paint him as an opportunist and a liar.

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"You're now saying that you lied while working at Enron," said Daniel Petrocelli, Skilling's head legal counsel.

"Yes," answered Delainey.

"In your very first talk to your new employees, you're telling us you lied," said Petrocelli. "You lied to Wall Street analysts. How the heck did you lie so much and still get away with it?"

"I was caught up in the Enron story," said Delainey. "I was in denial. I was trying to protect myself."

"Are you still trying to protect yourself?" asked Petrocelli.

"No, now I'm telling the truth," responded Delainey.

Petrocelli went on to summarize Delainey's fast rise at Enron, and how he had his sights on Skilling's job.

"Is it fair to say you're an opportunist?" asked Petrocelli.

"I wouldn't say opportunist," said Delainey. "I was aggressive."

Delainey told prosecutors Tuesday that he took part in covering up nearly $200 million in losses with the implicit approval of then-CEO Skilling, and that he improperly booked reserves as current profits to satisfy earnings targets.

Just days before first-quarter results were due in 2001, Delainey said the company, with the approval of Skilling, shifted part of its retail energy trading operation, and nearly $200 million in losses that came with it, to its more profitable wholesale trading business to avoid telling Wall Street that all wasn't well on the retail side.

But Petrocelli produced e-mails that showed Enron executives, including Delainey, were talking about combining the retail and wholesale divisions as far back as early 2000 and that Delainey was in the process of transferring the unit even before the end of the quarter meeting with Skilling.

He also said the retail division performed better after it was combined with the wholesale unit, indicating that the move did indeed have operational benefits and wasn't intended simply to hide the loss, as Delainey testified it was Tuesday.

Delainey agreed that business did get better at the retail division, although it still didn't turn a profit. He said the discussions to merge the two units back in 2000 didn't go anywhere because there was no interest, and that he was only transferring part of the retail unit before the meeting with Skilling, not the whole thing.

Petrocelli also took issue with Delainey's version of events at the meeting just prior to the end of the first quarter, the one where Delainey contends Skilling OK the accounting fraud and asked Delainey "what he wanted to do," which Delainey said he understood to mean "get in line."

"Mr. Skilling, he's not a very subtle guy, he's pretty direct," said Petrocelli, to which Delainey agreed. "Yet in the meeting he said 'what do you want to do,' and that's the worst statement he made."

Petrocelli also asked Delainey if he had any evidence to back up his version of events at the meeting. Delainey responded that he did not.

In an attempt to further discredit Delainey, Petrocelli asked Delainey why he didn't ask other Enron executives involved in moving the retail business to the wholesale business to keep quiet about the supposed fraud, to which Delainey said he wasn't sure they were aware there was a fraud being hatched.

"If you're not too sure (a senior Enron executive) was aware there was a fraud being hatched, it must not have been too clear there was a fraud being hatched," said Petrocelli.

Delainey's cross examination is scheduled to continue Thursday.

Delainey pleaded guilty in 2003 to insider trading and forfeited $4.2 million in profits from his stock sales. In addition, he agreed to cooperate with the government in exchange for possibly receiving a lighter prison sentence, which could range from zero to 10 years. He said cooperation with the government entailed telling the truth about events at Enron.

The prosecution said after proceedings finished Wednesday that Andrew Fastow, Enron's former chief financial officer expected to be the government's star witness, could take the stand as early as Monday.

The defense also wanted to know when the prosecution would finish its case, because they needed time to prepare Lay and Skilling, who Petrocelli said would be taking the stand.

The prosecution said it expected to have arguments wrapped up by the end of March.

Lay and Skilling face multiple counts of fraud and conspiracy for lying to investors about the health of the company. The two men deny the charges and say there was no conspiracy to commit fraud.

Earlier Wednesday lawyers conducted a contentious examination of Tim Belden, a former trader at the company's wholesale energy desk, in which a lawyer for Skilling, Randall Oppenheimer, argued that Enron executives rolled the company's loss-making retail trading unit into its profitable wholesale unit because the employees at the wholesale division were more qualified to manage it.

But the prosecution countered that discussions about how this group could manage the retail division didn't occur until the second quarter of 2001 The move was made in the first quarter.

After Skilling's lawyer finished with Belden, Lay's lawyer, Michael Ramsey, took him to task for striking a plea bargain with the government.

The prosecution countered that the possibility for a reduced sentence isn't dependent on a conviction.

Belden told the jury Tuesday how the company made money by taking advantage of wide fluctuations in the price of electricity.

He was considered the mastermind for some of the strategies that contributed to the energy crisis in California and was the first person to be charged in the manipulation of Western energy markets.

Enron filed for bankruptcy in December 2001, at the time the largest bankruptcy in U.S. history. It was once the nation's seventh largest company.

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