Skilling, Jeffrey - ex-Enron President in feder...
Jeffrey Skilling
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Jeffrey Keith "Jeff" Skilling (born November 25, 1953) is the former president of Enron Corporation, headquartered in Houston,Texas. In 2006 he was convicted of multiple federal felony charges relating to Enron's financial collapse, and is currently serving a 24-year, four-month prison sentence at the Federal Correctional Institution (FCI) – Englewood in Littleton, Colorado. The Supreme Court of the United States heard arguments in the appeal of the case March 1, 2010. On June 24, 2010, the Supreme Court vacated part of Skilling's conviction and transferred the case back to the lower court for further proceedings. During April 2011 a three judge 5th Circuit Court panel ruled that the verdict would have been the same despite the legal issues being discussed, and Skilling's conviction was confirmed. Skilling appealed this new decision to the Supreme Court, but was denied certiorari. However, in April 2013 news outlets reported that government officials may cut a deal with Skilling which would entail his release from prison earlier than expected.
Enron
Enron top brass Jeffrey Skilling and Kenneth Lay
Skilling started his career in Houston as an analyst for First City Bancorporation of Texas in Houston. First City was one of Enron's banks and just before it failed the first time, Skilling quit. The CEO of Collecting Bank, the FDIC's facility for managing the bad assets of First City, was Sam Segnar, the first CEO and chairman of Enron. The new First City Bank, headed by A. Robert Abboud, was also an Enron bank. Abboud was the former president of First Chicago Bank and Occidental Petroleum under Armand Hammer. First City was initiated by Judge James Andersen Elkins and his law partnership, Vinson & Elkins, one of Enron's main law companies. As a consultant for McKinsey & Company, Skilling worked with Enron during 1987, helping the company create a forward market in natural gas. Skilling impressed Kenneth Lay in his capacity as a consultant, and was hired by Lay during 1990 as chairman and chief executive officer of Enron Finance Corp. In 1991, he became the chairman of Enron Gas Services Co., which was a result of the merger of Enron Gas Marketing and Enron Finance Corp. Skilling was named CEO and managing director of Enron Capital & Trade Resources, which was the subsidiary responsible for energy trading and marketing. He was promoted to president and chief operating officerof Enron during 1997, second only to Lay, while remaining the manager of Enron Capital & Trade Resources. During 1999, Enron initiated Enron Online, an Internet-based trading operation, which was used by virtually every energy company in the United States.
During Skilling's management, Enron adopted "mark-to-market" accounting, in which anticipated future profits from any deal were accounted for by estimating their present value rather than historical cost. Skilling joked about the California energy crisis at one meeting of Enron employees by asking, "What is the difference between California and the Titanic? At least when the Titanic went down, the lights were on". Skilling later attributed the remark to frayed relations between Enron and California. His employees, meanwhile, plotted to keep the price of energy high in California.
Skilling began advocating a novel idea: the company didn't really need any "assets". By promoting the company's aggressive investment strategy, he helped make Enron the largest wholesaler of gas and electricity, with $27 billion traded in a quarter. On February 12, 2001, Skilling was named CEO of Enron, receiving $132 million during a single year.
On March 28, 2001,PBS's Frontline interviewed Skilling, where he claimed for Enron "We are the good guys. We are on the side of angels".
Skilling unexpectedly resigned on August 14 of that year, citing personal reasons, and he soon sold large amounts of his shares in the corporation. Then-chairman Kenneth Lay, who previously served as CEO for 15 years, returned as CEO until the company declared bankruptcy during December 2001. When brought in front of congressional committees, Skilling stated that he had "no knowledge" of the complicated scandal that would eventually result in Enron's bankruptcy.
Indictment and trial
Skilling was indicted on 35 counts of fraud,insider trading, and other crimes related to the Enron scandal. He surrendered to theFederal Bureau of Investigation on February 19, 2004, and pleaded not guilty to all charges. The indictments emphasized his probable knowledge of, and likely direct involvement with, the fraudulent transactions within Enron. About a month after quitting Enron, Skilling sold almost $60 million of his stake in the company (in blocks of 10,000 to 500,000 shares), resulting in the prosecutors' allegation that he sold those shares with inside information of Enron's impending bankruptcy. Skilling's main attorney was Daniel Petrocelli, the 52-year-old civil litigator who represented Ron Goldman's father in his successful civil suit against O.J. Simpson for negligent death. Skilling spent $40 million in preparation forthe trial, of which at least $23 million went to his defense lawyers' retainer. Skilling's younger brother Mark is an attorney and assisted his legal team during the criminal trial.
The trial began on January 30, 2006, in Houston, despite repeated protests from defense attorneys calling for a change in venue on the grounds that "it was impossible to get a fair trial in Houston", the base of the Enron catastrophe. Skilling, known for his harsh attitude and arrogance, lost his temper on the witness stand during the trial. Enron's bankruptcy, the largest in U.S. history when it was filed during December 2001, cost 20,000 employees their jobs. In addition, many of them lost their life savings. Investors also lost billions. However, Skilling and many of the company's executives had sold huge portions of their Enron stock before the bankruptcy filing, making a substantial profit. When interviewed outside court during the trial by Dutch journalist Stephan Tychon of pollutico.com about industrial dominance, Skilling admitted that industrial dominance and abuse constitutes a global problem by saying:"Oh yes, yes sure, it does."On May 25, 2006, the jury returned with the following findings regarding Skilling:
In a front page interview with The Wall Street Journal on June 17, 2006, Skilling claimed, among other things, that he had been melancholic after the Enron bankruptcy and considered committing suicide, but that his indictment actually ended his depression; that the worst witness against him was himself; and that he will be able to survive a long prison term as long as he is given "something to do, something to accomplish" while in prison.
On October 23, 2006, Skilling was sentenced to 24 years and four months in prison, and fined $45 million. The case was appealed but all of his convictions save one were ultimately upheld, as was his sentence. Skilling's request to remain free during the appeal was denied by Judge Patrick Higginbotham of the 5th U.S. Circuit Court of Appeals on December 12, 2006. In ordering Skilling's immediate imprisonment, the judge wrote, "Skilling raises no substantial question that is likely to result in the reversal of his convictions on all of the charged counts," although the order also noted "serious frailties" were possible in some (but not all) of the convictions.
Skilling began his sentence on December 13, 2006, and is currently housed at low security federal prison in Littleton, Colorado. According to the Federal Bureau of Prisons, he is scheduled for release on February 21, 2028, when he will be 74 years old.