Thursday, February 19, 2004

Ex-Enron CEO to be charged


Jeffrey Skilling expected to surrender today

By Kristen Hays
The Associated Press

HOUSTON - Jeffrey Skilling, the former Enron Corp. chief executive who resigned less than four months before the company imploded in scandal, was expected to surrender today on charges related to the company's collapse, sources said late Wednesday.

The criminal charges come almost exactly two years after Skilling told Congress that he knew nothing about serious problems at the energy trader.

Two sources close to the investigation said Wednesday that Skilling was expected to surrender to the FBI early today and then appear before a federal judge.

It was not immediately clear what charges Skilling would face, although the sources said they would likely be conspiracy and fraud.

Barring any last-minute delays, Skilling, 50, would be the highest-profile former Enron executive to date to face criminal charges. One of his lawyers, Bruce Hiler, went to the federal courthouse in Houston Wednesday afternoon to familiarize himself with its layout.

Skilling's former boss, Enron founder and former chairman Kenneth Lay, has not been charged, and the sources said it was unclear when or if he would become a defendant.

Both men, through their lawyers, have staunchly maintained their innocence since Enron collapsed and went bankrupt in December 2001.

Two years ago, Skilling insisted during testimony before two congressional panels that he thought Enron was financially healthy when he abruptly quit after only six months as CEO, citing personal reasons he has not explained. Other former executives, including Lay, invoked their Fifth Amendment rights and declined to testify before Congress.

Skilling has been publicly silent since 2002, letting his lawyers speak for him.

Skilling would be the 28th individual to be charged and one of the most anticipated in the Justice Department's methodical investigation, which passed its two-year mark last month.

It also would come just a month after former Enron finance chief Andrew Fastow pleaded guilty to two counts of conspiracy and agreed to help prosecutors pursue other cases.

Fastow was one of Skilling's first hires shortly after Skilling joined Enron in 1990. In his guilty plea, Fastow admitted that he and others manipulated Enron's books so the company would appear successful while using various partnerships to enrich himself, his family and chosen colleagues.

Fastow's lawyers said when he was indicted on almost 100 counts in October 2002 that he was hired to do off-the-books financing and that Enron's top officers and directors approved and praised his work.

The sources said Skilling likely would be charged with conspiracy and fraud charges, as were Richard Causey, Enron's former top accountant who, like Fastow, reported directly to Skilling.

Causey pleaded innocent and, unlike Fastow, is not accused of skimming millions of dollars for himself through shady self-dealing.

But all the top executives, including Skilling, pocketed millions of dollars from sales of stock prosecutors allege was inflated. Enron shares hit a high of $90 in August 2000.

The main action in a conglomerate of federal shareholder lawsuits in Houston alleges Skilling gained more than $70 million from selling 1.3 million shares of stock - about 43 percent of his holdings - from June 1996 through November 2001. Skilling also received $13.2 million in bonuses from 1997 through 2001.

Skilling has said his stock sales were part of an ongoing program to sell a certain amount each month, and he didn't dump shares for fear of Enron going under.




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