Enron CEO Skilling’s prision term reduced to 14 years

HOUSTON — One of the country’s most notorious financial scandals came to a protracted legal conclusion Friday as ex-Enron Corp. CEO Jeffrey Skilling — already in prison for his role in the once-mighty energy giant’s collapse — was resentenced to 14 years as part of a court-ordered reduction and a separate agreement with prosecutors.

Skilling has been in prison since 2006, when he was sentenced to more than 24 years by U.S. District Judge Sim Lake. But an appeals court vacated his prison term in 2009, ruling that a sentencing guideline was improperly applied. That meant a reduction of as much as nine years.

However, Skilling’s resentencing was delayed for years as he unsuccessfully sought to overturn his convictions, including appealing to the U.S. Supreme Court.

Skilling declined to make statements during the resentencing hearing.

The Justice Department said that in an effort to resolve a case that’s gone on for more than 10 years, it agreed to an additional reduction of about 20 months as part of a deal to stop Skilling from filing any more appeals. Federal prosecutors say the deal will allow for the distribution of $41.8 million of Skilling’s assets in restitution to victims of Enron’s 2001 collapse.

Even with the reduced sentence, Skilling’s prison term is still the longest of those involved in the Enron scandal. He was the highest-ranking executive to be punished. Enron founder Kenneth Lay’s similar convictions were vacated after he died of heart disease less than two months after his trial.

Skilling, 59, was convicted in 2006 on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of Houston-based Enron. The company, once the seventh-largest in the U.S., went bankrupt under the weight of years of illicit business deals and accounting tricks.

A one-time visionary, Skilling was vilified by many former Enron employees for denying any wrongdoing.

Former Enron worker Diana Peters, the only victim who spoke at the resentencing hearing, said employees gave their hard work, spirit and trust to Skilling and others at Enron.

“Jeff Skilling betrayed that trust to those employees and played a part in the financial collapse of an amazing company,” Peters said.

The U.S. Supreme Court said in 2010 that one of Skilling’s convictions was flawed when it sharply curtailed the use of the “honest services” fraud law — a short addendum to the federal mail and wire fraud statute that makes it illegal to scheme to deprive investors of “the intangible right to honest services.”

The high court ruled that prosecutors can use the law only in cases where evidence shows the defendant accepted bribes or kickbacks, and because Skilling’s misconduct entailed no such things, he did not conspire to commit honest services fraud.

The Supreme Court told a lower court to decide whether he deserved a new trial; the lower court said no.

Enron’s collapse put more than 5,000 people out of work, wiped out more than $2 billion in employee pensions and rendered worthless $60 billion in Enron stock. Its aftershocks were felt across the city and the U.S. energy industry.

———

Follow Juan A. Lozano at http://www.twitter.com/juanlozano70 .

More in Herald Business Journal

Stan Jones, left, father of Vice Chairwoman Teri Gobin, gets a handshake from Jared Parks and Herman Williams Sr. hugs Bonnie Juneau, right, after the Tulalip Tribes and Quil Ceda Creek Casino held a groundbreaking ceremony for the new Quil Ceda Creek Casino Hotel on Tuesday, Dec. 12, 2017 at Tulalip Reservation, Wa. The casino hotel will be built on sixteen (16) acres of ancestral Tulalip Tribal land and will will feature a main Casino that will showcase as many as 1,500 slot machines. (Andy Bronson / The Herald)
Tulalips break ground on new Quil Ceda Creek Casino Hotel

A 150-room hotel was added to what is now a $140 million project in Tulalip.

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Trudeau snubs Boeing, unveils plan to buy used Aussie jets

Trudeau will be assessing the impact fighter jet contracts have on his country’s economy.

Boeing raises dividend 20%, continues stock buyback program

The manufacturer said it has repurchased $9.2 billion worth of its shares this year.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Most Read