Risk & Compliance

Is Skilling’s Time Just About Up?

Enron's former CEO may face charges as early as this week.
Stephen TaubFebruary 17, 2004

Prosecutors may bring a grand jury indictment against Jeffrey Skilling, Enron’s former chief executive officer, as early as this week, according to the Houston Chronicle.

The charges would come on the heels of an indictment last month against former chief accounting officer Rick Causey and guilty pleas by former chief financial officer Andrew Fastow and his wife, Lea. Citing sources, however, the Chronicle noted that prosecutors might postpone their plans for any number of logistical or strategic reasons.

Andrew Fastow, whose plea agreement calls for him to serve 10 years in prison, is likely cooperating with prosecutors in developing their case against Skilling, according to lawyers familiar with the case.

Skilling — who was Enron’s chief operating officer from 1997 through early 2001, and who served as chief executive officer until his abrupt resignation in August 2001, a few months before the company declared bankruptcy — has always maintained his innocence. In contrast with other Enron executives and employees, he agreed to testify at congressional hearings and did not invoke his Fifth Amendment rights.

Bruce Hiler, Skilling’s Washington, D.C.-based attorney, told the Chronicle that Skilling relied on his subordinates and on the accountants and lawyers hired by Enron. “If a COO can’t rely on the dozens of experts who review and recommend transactions,” Hiler told the paper, “then no CO should go to work tomorrow, because they may find themselves indicted.”

If the grand jury indicts Skilling, reported the Chronicle, the charges would be similar to those brought several weeks ago against Causey, who faces six counts of securities fraud and conspiracy to commit securities fraud. Causey pleaded not guilty, and has given no indication since that he intends to change his plea or to cooperate with prosecutors, according to the paper.

Insiders cited by the Chronicle believe that the government may supersede Causey’s indictment and add Skilling to it with similar charges. If so, Skilling’s case would also be before U.S. District Judge Sim Lake, whose next meeting with attorneys in the Causey case is a March scheduling conference.