Risk & Compliance

Skilling: Go Directly to Jail?

Enron Task Force prosecutors allege that he violated terms of his $5 billion bond.
Stephen TaubApril 23, 2004

Is Jeffrey Skilling headed for the slammer, sooner rather than later?

This is the latest question facing the former Enron Corp. chief executive officer, who has been charged with nearly three dozen counts of fraud, conspiracy, and insider trading related to the collapse of the energy giant. But the current issue, according to Enron Task Force prosecutors, arose because Skilling violated terms of his $5 billion bond during the night of April 8 — or, actually, during the wee hours of April 9.

According to the Houston Chronicle, Skilling’s bond requires him to “refrain from excessive use of alcohol; report any contact with law enforcement as soon as possible to pretrial services; and not commit any federal, state or local offense.”

A court filing by Task Force prosecutors alleges that Skilling was “drinking inordinately,” tried to remove a car license plate, and got into a skirmish with patrons at a Manhattan bar on April 9, according to the Washington Post. His blood alcohol level was 0.19, more than double the legal driving level in most states, added the paper. In addition, he failed to notify court officials of his contact with the police for several hours, said the Post, citing the filing.

The Post stressed that prosecutors are asking only for a hearing and not for specific changes to the terms of Skilling’s bail. U.S. District Judge Sim Lake — who recently sentenced a former Dynegy executive to 24 years in prison for accounting fraud — could choose to detain Skilling or charge him with contempt of court. Lake — who “has a reputation as a no-nonsense jurist,” according to the paper — could also revoke Skilling’s bail, which would land him behind bars.

According to the Post, which cites court papers (and in an account that differs from some initial press reports), Skilling and his wife befriended two men at the Four Seasons Hotel bar, then traveled with them to Lexington Bar & Books on the Upper East Side, where they made three more new acquaintances, including a married couple. After “several rounds” and a $171 bar tab that Skilling paid, they all continued drinking together until Skilling “began behaving in a hostile manner.”

Skilling allegedly accused one of the men from the Four Seasons of being an FBI agent, then claimed that three more members of the group were with the FBI, the Post continued. The bar manager asked the entire group to leave around 3:30 a.m., and after leaving Skilling “tried to remove forcibly the front license plate” of the married couple’s vehicle, apparently to help prove their identity, court papers reportedly said.

Skilling also reportedly “attempted to lift” the blouse of the woman in the group, saying he was looking for a recording device. This touched off a skirmish that led to Skilling being struck and one patron’s nose being cut, said the paper’s account. Skilling “grabbed” his wife — who was using a crutch for an unrelated injury — “inadvertently causing her to fall to the ground,” prosecutors reportedly added.

“At one point, Skilling went to the middle of the street, put his hands behind his back and began talking to the sky, asking if FBI cameras were capturing what was happening,” wrote prosecutors, according to the report. Police then took Skilling and his wife to the hospital after determining he was “intoxicated, irrational, and highly uncooperative,” added prosecutors.

“Obviously Mr. Skilling regrets the episode and wishes it never happened,” Daniel M. Petrocelli, his lead defense lawyer, told the Post. “But it certainly did not happen as reported in the Task Force motion. What I find most disturbing is, it was not necessary for the Task Force to have filed this motion. It only reinforces the view that the government appears more committed to prejudicing my client than ensuring him a fair trial.”

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