Enron's former chief is jailed for 24 years
Pastor Dale Morgan
Enron's former chief is jailed for 24 years*
· Mastermind of energy firm fraud to forfeit $45m
· Judge says victims face life sentence of poverty
Andrew Clark in New York
Tuesday October 24, 2006
The Guardian
The former Enron chief executive Jeffrey Skilling was sentenced to 24
years and four months in jail yesterday for masterminding the energy
company's web of fraud-riddled financial dealings that collapsed in one
of America's biggest corporate scandals.
Skilling, who led Enron at the height of its corrupt fortunes, was
handed one of the toughest-ever penalties for a white-collar crime, a
decision greeted with satisfaction by victims of the company's fall.
The millionaire was put under house arrest and fitted with an electronic
tag. He was told that he will be transferred to a North Carolina prison
as soon as the jail is ready to receive him. He was also ordered to
forfeit $45m (£30m), to be distributed to former Enron staff.
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At Houston's federal court, district judge Sim Lake said Skilling's
actions had destroyed the livelihoods of his employees: "As the many
victims have so eloquently testified, his crimes have imposed on
hundreds, if not thousands, a life sentence of poverty."
Skilling, 52, was convicted in May by a jury on 19 counts of conspiracy,
fraud and insider trading. His co-defendant, the former Enron chairman
Ken Lay, died of a heart attack in July, leaving Skilling to face the
wrath of victims alone.
The prosecutor, Sean Berkowitz, said the fraud was "as large and serious
as any fraud in the nation's history", adding: "This was not a one-time
event where someone made a judgment in error."
The court found that Skilling was responsible for a web of off-balance
sheet ventures used to conceal Enron's losses. He enriched himself by
selling $63m of shares in the 18 months before the company collapsed.
He has vowed to appeal and he continued to protest his innocence
yesterday, insisting he had been in the dark about wrongdoing at the
firm. "Your honour, I am innocent of these charges," he said. "We will
continue to pursue my constitutional rights."
Fighting back tears, Skilling rejected suggestions that he had shown no
remorse over Enron's demise: "I can tell you that's just the furthest
thing from the truth. It's been very hard on me, but probably more
importantly, incredibly hard on my family, incredibly hard on employees
of Enron, incredibly hard on my friends and incredibly hard on the
community."
The penalty is the second most severe ever for a white-collar fraud in
America, exceeded only by a 25-year sentence handed to the former
WorldCom boss Bernie Ebbers last year.
Enron's demise prompted an estimated 21,000 redundancies. A handful of
people who lost jobs, savings and pensions were permitted to talk about
their suffering in court.
Anne Beliveux, who worked as an administrative assistant at Enron, told
the court that she lost half a million dollars, after being encouraged
by senior executives to invest in the company's shares.
"Never in my wildest dreams would I think I would be facing what I'm
facing when I turn 65, and that is there is no retirement," she said,
telling Skilling that his actions were motivated by "greed, nothing but
greed, and you should be ashamed of yourself".
Another victim called Skilling a "thief" and a "drunk", adding: "My
stomach does flips every time I hear your name."
The judge ruled that Skilling's crimes were aggravated through his use
of sophisticated means, by his abuse of Enron's pension funds and
because he perjured himself in statements about his share sales.
There was unease in some legal circles about the scale of the penalty.
Sam Buell, a former prosecutor on the Enron case who teaches at
Washington University in St Louis, said sentencing guidelines had been
lifted in recent decades due to concern that wealthy fraudsters were
getting away with their crimes.
"Maybe the pendulum has swung too far now in the opposite direction," he
told the Guardian. "When you start talking about 24 years for
white-collar fraud, there's not a lot of room above that for violent crime."
Skilling was convicted largely thanks to the evidence of Enron's former
chief financial officer Andrew Fastow, who turned supergrass against his
colleagues in return for a more modest sentence of six years' imprisonment.