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Did Jeff Skilling do anything illegal?

Did Jeff Skilling do anything illegal?

That was the question I kept asking myself while listening to federal prosecutors lay out a multiple-count fraud charge against the former Enron chief executive during his May 2006 trial in Houston, which I covered.

I was blogging the trial for The Post so I had a ringside seat for five weeks of the event and watched every moment while I was there. It's a question I still wonder about and apparently, so does the Supreme Court, which ruled for Skilling earlier today, saying that a key tool used by prosecutors for putting away white-collar criminals should not stand.

Quoting from my colleague Fred Barbash's story today:

"The justices were passing judgment on a federal statute used in the prosecution of [white-collar defendants]. It makes it a crime to deprive the public or one's employer or shareholders of the 'intangible right of honest services.' Although a favorite of federal prosecutors -- it figures in the current trial of former Illinois Gov. Rod Blagojevich -- it has been roundly criticized as being so vague as to make it impossible to know what sorts of actions are illegal. Skilling said it should be struck as unconstitutional. ... "Because Skilling's misconduct entailed no bribe or kickback, he did not conspire to commit honest-services fraud under our confined construction" of the law, Justice Ruth Bader Ginsburg wrote for the majority."

This does not give Skilling a get-out-of-jail-free card. It does, however, return control of his conviction to a federal appeals court, where he and his lawyer, Daniel Petrocelli, will no doubt pursue it. Skilling is four years into a 24-year sentence.

There is no doubt that Skilling and the other Enron executive convicted along with him, the late Ken Lay, ordered, carried out and allowed actions that caused millions and millions of dollars of harm to millions of people. Their chief victims were ordinary folks whose savings were invested in pension funds that bought the high-flying, seemingly impregnable Enron stock that eventually crashed. Their life savings were wiped out. But their justice should come in a civil -- not a criminal -- court, where they can and have sued for compensation.

While watching the trial of Skilling and Lay, I thought that the federal prosecutors did a terrific job of convincing the jury -- and me -- that they were bad guys. Selfish, arrogant, greedy, caring about nothing but the alpha-male rewards of money, juice, power and action. But the prosecutors did not necessarily convince me that Skilling had done anything illegal.

Lay, yes. They had a pretty good smoking gun against Lay, who died shortly after he was convicted. Lay sold a ton of his Enron stock in the company's final months while encouraging his employees to buy more. Further, he sold his Enron stock back to Enron instead of on an open exchange because by selling it back to the company, the stock sale wouldn't be reported until months later. I'd have voted guilty on Lay, too.

But Skilling? Dunno. The conventional wisdom before the trial was that the avuncular Lay would win the jury with his aw-shucks, down-home style and the notoriously hot-headed Skilling would pull a scene like Jack Nicholson out of "A Few Good Men," screaming the equivalent of "You can't handle the truth!"

Instead, exactly the opposite played out in the courtroom. Lay, who, as it turned out later, was in poor health, was crabbed, angry and outraged that some upstart federal prosecutor punk would question him -- Ken Lay! -- on how to run a business. Contempt oozed from every pore.

Skilling, on the other hand, was winning. Like a calm professor, he explained Enron's complex energy-trading business, even getting down off the witness stand a couple of times to illustrate his lecture on a whiteboard. It is true that self-delusion is at the heart of every crime, but Skilling sounded like a man who believed he had done nothing illegal. Wrong, risky, mistaken; yes, he allowed. But not illegal.

I'm not saying I was won over by Skilling's personality. I'm saying the prosecution did not present enough hard evidence -- that came from reliable sources other than turned-state's-witness former Enron chief financial officer Andy Fastow -- to convince me that Skilling committed illegal acts.

At the end of the trial, I felt like I did after watching Oliver Stone's conspiracy film, "JFK," the centerpiece of which is a trial in which an attorney is ostensibly trying to argue the guilt of a defendant but ends up laying out a multiple-shooter theory of JFK's assassination. At the end of the movie, the prosecutor did a great job convincing me that Lee Harvey Oswald did not act alone. But he did not convince me that the defendant was guilty.

Today's Supreme Court ruling gives Skilling's appeal some new muscle, and I would not be surprised, someday, to see it overturned.

By Frank Ahrens  |  June 24, 2010; 2:45 PM ET
Categories:  Corporations  
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So Skilling was totally ignorant of all the goings-on documented in "Enron: The Smartest Guys in the Room"? Or was he aware of the immoral gaming of the electric market and just didn't care as long as he got his millions?

Unless the guys who game the system lose their assets and do HARD JAIL TIME, it's a win-win proposition for them. And I did notice that the beneficiaries of Enrons' "campaign contributions" just coincidentally write the laws that were used to prosecute them. One hand washes the other.

Posted by: shadowmagician | June 24, 2010 3:58 PM | Report abuse

"Deprivation of honest services is a b______ charge. That is why so many of the cases that involved only that charge or that obtained convictions only on that charge were overturned. Federal prosecutors are lazy. They throw everything against the wall and hope something sticks.

Ain't no way he will get off. And as 36 year Enron ex, my firm opinion is that he did more illegal stuff than Lay did. He and Fastow were thick as thieves. Of course, being hubritic (my word coined for eat up with hubris) he knew that whatever he did was right.

As to convincing a jury, I have a buddy who is a federal court reporter. He told me years ago that he had seen more than one person convicted of a crime that didn't exist because the issues were so complex that the jurors could be bamboozled.

And then it gets overturned and if you're AA, you still suffer the penalty.

Posted by: contrarydave | June 24, 2010 4:51 PM | Report abuse

i think we're only a few years to a decade away from people getting fed up enough to simply start taking out the likes of Skilling and their families.
It will be wrong, but Bonnie and Clyde and Dillinger were wrong.. and people loved them.

Posted by: newagent99 | June 24, 2010 4:52 PM | Report abuse

MACDONALD BANK is proceeding with the $22,000,000,000 J. Paul Getty war crimes lawsuit in Washington against Getty Oil Company shareholders; based on Getty’s support for Hitler.

J. Paul Getty; FBI File 100.1202, June 26, 1940, Espionage.

2003 documents declassified by UK Warfare Ministry reveal that in Oct. 1941 the pro-Nazi Jean Paul Getty employed and lodged Nazis at his Pierre Hotel in New York City; Nazis who were involved in spying on and sabotaging Allied Forces’ war production plants.

43,000 people were killed in the UK while J. Paul Getty was in Berlin still shipping oil to Hitler five months before Pearl Harbor … December 7, 1941. J.P. Getty was investing in German government bonds. Jean Paul Getty’s mother; Catherine Risher was German. Getty assiduously added to his vast collection with the Nazis.


- v. -


Posted by: MacDonald1 | June 24, 2010 6:00 PM | Report abuse

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