HOUSTON -- Former Enron Chief Executive Jeffrey Skilling denied on Tuesday that he spearheaded a conspiracy to lie about the company's strength.

He testified at his and Enron founder Kenneth Lay's fraud and conspiracy trial in Houston that prosecution witnesses lied when they said he was part of such a scheme.

Responding to questioning by his attorney, Skilling said he was smart, but not smart enough to head such a conspiracy for years without getting caught.

Skilling was in his second day of testimony in his own defense as he continued to describe Enron's golden days of the 1990s.

During those years, the company basked in media plaudits, launched retail and broadband ventures, and watched its stock price soar.

On Monday, Skilling told jurors he had no clue the company was about to flame out. He said he left the company he took credit for building because he was burned out and troubled about its falling stock price.

Skilling declared that he is "absolutely innocent."

Skilling admitted to jurors that he was a "little nervous" because his "life is on the line."

Skilling and Lay are accused of repeatedly lying to investors and employees about Enron's financial health. Prosecutors say the men knew fraudulent accounting created a facade of success.

Lay plans to testify later this month.

Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly lying about Enron's financial strength.

Lay faces six counts of fraud and conspiracy for perpetuating the alleged scheme after Skilling resigned in August 2001.

They say they did nothing wrong.

If convicted, each could face decades in prison and millions of dollars in penalties.