|Page 2 of 2 <|
Skilling Gets 24 Years for Fraud at Enron
The judge acknowledged that Skilling had helped transform Enron into one of the nation's largest companies. Skilling and his lead lawyer took time to underscore their contention that Enron collapsed not because of fraud, but because the market lost confidence in the company months after his abrupt resignation in August 2001. That caused creditors to demand immediate payment for their loans, creating a cash crunch the company could not withstand.
Skilling enlisted friends, including his administrative assistant of two decades, to speak on his behalf. "I don't consider myself a victim of anything other than my shortsighted [investment] decisions," said the assistant, Sherri Sera. She called Skilling a "visionary" who "revolutionized" the energy industry. As she returned to her seat, she embraced Skilling's wife.
But Lake said Skilling's good works did not outweigh that he had "imposed on hundreds if not thousands of people a life sentence of poverty."
As part of the resolution of the case, Skilling also agreed to turn over what his lawyers called the "overwhelming majority" of his assets, about $45 million, including the proceeds from the sale of his Mediterranean-style mansion, to employees who lost more than $1 billion with Enron's demise. His lawyers at O'Melveny & Myers LLP are to receive $15.5 million to pay suppliers and to cover some fees, estimated at $30 million. In what analysts have called the highest-ticket criminal defense in history, the firm already has collected $40 million in cash from Skilling and his insurance policies to defend criminal and civil cases.
Under the federal sentencing guidelines, Skilling could have received more than 30 years in prison. Instead, the judge chose a term on the lower end of the range. The judge scuttled a defense request to shave 10 months off the prison term, a move that would have made Skilling eligible for a low-security facility with fewer restrictions than the medium-security prison where he ultimately will reside.
Skilling's term is by far the longest of any won by the Justice Department's Enron Task Force, which announced late Monday that it was closing its doors. Former finance chief Andrew S. Fastow, who admitted to siphoning millions of dollars from the energy-trading company but ultimately cut a deal with prosecutors and testified against Skilling, got a six-year sentence. Lay, the founder of Enron and also a defendant in the case, died of heart disease in July, only weeks after he and Skilling were convicted by a jury.
Lake threw out Lay's conviction last week, citing a legal precedent that comes into play after a defendant dies before he completes the appeals process. On Monday, prosecutors said they had filed a civil lawsuit against Lay's estate seeking to recover $2.5 million used to pay the mortgage on his Houston penthouse condominium, $10 million from a family trust and $22,000 from a bank account.
Outside the courthouse, Skilling met throngs of reporters and camera crews. Wearing a tracking device underneath his navy suit, he waxed about Enron's past business prospects and talked about the "nightmare" his life had become. He said he felt horrible about the victims of Enron's collapse, but added that he had not broken the law, despite the aggressive prosecutors, the demonizing media reports and the resounding jury verdict.
"In the Inquisition, only about 10 percent of the people held out," Skilling said. "I can tell you it ain't fun."