The Tech - Online EditionMIT's oldest and largest
newspaper & the first
newspaper published
on the web
Boston Weather: 36.0°F | Fair

Former Enron Chief Exec. Skilling Sentenced to More Than 24 Years

By Alexei Barrionuevo
THE NEW YORK TIMES


HOUSTON

Jeffrey K. Skilling was sentenced to 24 years and four months for his role in the pervasive fraud and conspiracy that led to the bankruptcy of Enron, closing the book on the government’s prosecution of top executives at the once-high-flying energy company.

Enron’s fall ushered in a wave of prosecutions against corruption at the highest levels of American business. Since then, the Justice Department has tightened the tourniquet around high-level executives involved in white-collar crime, leading to a series of stiff prison sentences.

Skilling stood stoically in his black suit as Judge Simeon T. Lake III read his sentence, which narrowly missed being the longest one ever handed down to a white-collar criminal. That record still belongs to Bernard J. Ebbers, the former chief executive of WorldCom, who was sentenced to 25 years last year for his role in the $11-billion fraud that led to that company’s collapse.

Skilling’s sentence nevertheless amounts to almost life imprisonment for the 52-year-old former chief executive, who in one decade transformed Enron from a sleepy pipeline company into an energy-trading juggernaut. Accounting schemes he approved masked huge debt and cash flow problems at the company that led to its ultimate demise. Shareholders at Enron, once the seventh-largest company in the country, lost billions of dollars in stock and retirement savings.

“As the many victims have testified, his crimes have imposed on hundreds if not thousands a life sentence of poverty,” Lake said, responding to criticism of the sentence as overly harsh.

Once in prison, Skilling could trim his sentence by 54 days a year with good behavior. And he could knock off one more year for participating in an inmate drug and alcohol treatment program, which the judge required.

Skilling has recently struggled with alcoholism. Despite being ordered not to drink by the court after a drunken scuffle with bar patrons in Manhattan in 2004, he was arrested last month by Dallas police for public intoxication and forced to spend a night in jail.

At Enron, Skilling alone now bears the dear price for fighting the charges that he and his co-defendant and Enron founder, Kenneth L. Lay, deceived analysts and investors about the company’s true financial condition. Lay was convicted in May of fraud and conspiracy but died suddenly in July of heart-related problems. Several of Lay’s family members and lawyers attended Monday’s sentencing.

For now, at least, Skilling will avoid the discomfort of prison life.

Lake denied Skilling’s request to remain free pending appeal. But he allowed him to be confined to his Houston home until the Bureau of Prisons assigns him to a correctional facility, which could be a few months. He left court wearing an electronic monitoring bracelet on an ankle under his trousers.

Skilling, who is appealing his verdict, continued to profess his innocence. “I am innocent of every one of these charges,” Skilling told the judge. “We will continue to pursue my constitutional rights and it’s not a dishonor to this court or anyone else who was involved in this, but I feel very strongly about this.”