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.
June 24, 2010; 2:45 PM ET
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