Skilling Begins Sentence for Enron Malfeasances
By Carrie JohnsonWashington Post Staff WriterThursday, December 14, 2006; Page D01
Former Enron chief executive Jeffrey K. Skilling reported to a low-security federal prison in Minnesota yesterday to start serving a 24-year, six-month sentence for his role in one of history's biggest corporate scandals.
Skilling arrived at the facility in Waseca, about 75 miles south of Minneapolis, at 1:07 p.m. EST. Accompanying him in a sport-utility vehicle were his wife, Rebecca, his longtime assistant Sherri Sera and his younger brother Mark. Under federal guidelines, Skilling, 53, must serve at least 85 percent of his sentence -- or more than two decades. He is appealing his conviction by a jury in May on 19 counts of fraud, making false statements and conspiracy.
The Houston energy trading company that Skilling transformed became a symbol of accounting trickery after its December 2001 collapse into bankruptcy protection. Skilling and his co-defendant, Kenneth L. Lay, who died in July, bore the brunt of public vilification after financial scandals cost thousands of employees their jobs and savings.
In an emotional roller coaster, Skilling's immediate future was thrown into doubt Monday when a federal appeals court said it needed more time to consider whether he should remain free pending appeal. The next day, Circuit Judge Patrick E. Higginbotham settled that question with a two-page ruling ordering Skilling to report to prison.
But Higginbotham's ruling indicated that there were "serious frailties" with Skilling's conviction on several charges. That has given hope to Skilling's defense team that the appeals court may overturn at least some of his convictions. In his brief ruling, the judge did not cite problems with five counts of lying to auditors.
Defense attorney Daniel M. Petrocelli said in an e-mail message, "After all our arguments are presented, we are confident all the convictions will be reversed and Jeff will be given a new trial."
Over the course of the Enron probe, the biggest corporate investigation in history, more than 15 of the company's executives, including the leaders of its top three business units, pleaded guilty and agreed to cooperate against their former bosses.
Skilling's sentencing in October marked the last in a series of stiff penalties given to top executives convicted of corporate crimes committed in the booming '90s. His prison term is only a few months shorter than that of WorldCom founder Bernard J. Ebbers, who is serving a 25-year sentence in Louisiana for spearheading an accounting fraud at the telecommunications company he founded. Ebbers drove himself to prison this fall while his wife sat beside him in the front seat.
Skilling, who continues to profess his innocence and make the case that Enron was a healthy enterprise, will spend his time alongside 1,070 other inmates, most of whom were incarcerated for committing federal drug crimes, said Felicia Ponce, a prison spokeswoman.
Skilling will be required to work 7 1/2 hours per day at one of a variety of institutional jobs, including food service worker, warehouse employee and groundskeeper. Inmates earn between 12 and 40 cents per hour. The majority of the rooms in the prison, a converted college campus, contain space for four men, with a separate sink and shower area in a nearby location.
Skilling, who has openly wrestled with alcohol problems and depression, could slash more than a year off his sentence for successfully completing a prison treatment program.
A graduate of Harvard Business School, Skilling launched far-reaching ideas as a corporate consultant at McKinsey & Co. He was lured to work at Enron by Lay, the company's chairman, who died weeks after he was convicted on 10 conspiracy and false statements charges. A judge, following longstanding legal precedent, wiped out Lay's conviction because he had not had a chance to appeal before he died.
That means that Skilling, who left Enron a few months before its bankruptcy in December 2001, will be the highest-ranking leader of the energy firm to be called to account. Onetime finance chief Andrew S. Fastow, who pocketed more than $60 million for himself and his friends, is serving a six-year prison term. Former accounting executive Richard A. Causey will begin a 5 1/2 -year term Jan. 2.
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