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Jeff Skilling

Skilling settles longstanding lawsuit

Old business.

Less than two months after leaving prison, former Enron Chief Executive Officer Jeffrey Skilling settled a 17-year-old lawsuit claiming he helped defraud a Canadian investment firm with the promotion of the defunct energy company’s securities as it headed toward collapse.

SilverCreek Management Inc., a Toronto-based investment firm that bought Enron-issued bonds in October 2001, sued in Manhattan federal court, accusing the company’s accountants, banks, directors, law firms and underwriters of helping facilitate the oil trader’s demise.

SilverCreek had earlier reached settlements with all defendants except Skilling and former Enron Chief Accounting Officer Richard Causey. In a letter last month, it said it had an agreement-in-principle with Causey. And on Friday, SilverCreek and Skilling told U.S. District Judge J. Paul Oetken that they also reached a settlement-in-principle. The terms weren’t disclosed.

Amazingly, I don’t have any old posts to refer to for background information. There definitely lawsuits in the offing as Skilling was first sent to jail, but this one predates that event by several years, so who knows. I do wonder if the settlement offer includes payment in cryptocurrency. That would just be fitting, don’t you think?

Enron’s other legacy

The company is long gone, its leaders have faded into history, but Enron’s emails are forever.

During its 2002 investigation of the bankruptcy of Enron, the US Federal Energy Regulatory Commission (FERC) checked the energy company’s emails: more than 600,000 messages sent from 158 employees, mostly senior management.

The collected missives—a mixture of high-level business negotiations, discussions between managers and their spouses about holiday plans, and many, many requests to be unsubscribed from mailing lists—formed part of the evidence that led FERC to conclude the company had in fact engaged in illegal price manipulation, and the US Department of Justice to press criminal charges against former CEOs Kenneth Lay and Jeff Skilling.

After its investigation, the commission determined the emails were in the public’s interest and dumped them on a website.

Though ostensibly for research and academic use, the trove was so messy and unwieldy that it was effectively useless—until an MIT computer science professor named Leslie Kaelbling bought the data for $10,000 and handed it over to colleagues who cleaned it up, took out duplicates, organized the remaining 200,000 messages into folders, and released it into the world.

“What was weird was that the data itself was in the public domain, but we still had to pay a company for the service of giving it to us on a disk,” Kaelbling said. “After that, we just gave it away for free.”

If Enron went down for defrauding the public, the company has unwittingly repaid a small part of its debt to society through the gift of its emails.

The Enron Corpus, as the collection is known, has been used in more than 100 projects since that research team presented it to the public in 2004. As the biggest public collection of natural written language in an organizational setting, it has been used to study everything from statistics to artificial intelligence to email attachment habits. An online art project by two Brooklyn artists will send every single one of the emails to your personal inbox, a process which (depending on the frequency of emails you request) will take anywhere from seven days to seven years.

Making all this data public has had the benefit of allowing all kinds of research into corporate behavior that just wouldn’t be possible without it. The downside is that as these emails are used as training data for artificial intelligence projects – the Enron Corpus was the training set used for the prototype of Gmail’s “smart compose” feature, though not its final version – they represent a small and atypical slice of society. That’s an entry point for bias to creep into algorithms and other automated processes. I’m sure there’s plenty more to be done with and learned from the Enron Corpus. We just shouldn’t consider it to be the be-all and end-all of how people communicate.

(I found this story while doing a Google news search on Jeff Skilling following the news of his release. So credit the Enron Corpus for finding a way to spread the word about itself, too.)

Skilling officially sprung

There he goes.

Jeffrey K. Skilling, the former Enron CEO who spent the past 12 years in prison for his role in masterminding one of most notorious corporate fraud cases in history, was released from federal custody on Thursday, the Bureau of Prisons said.

In August, Skilling was released to a halfway house at an undisclosed location from a minimum security federal prison camp in Alabama.

Enron’s collapse cost investors billions of dollars and wiped out the retirement savings and jobs of thousands of employees. Skilling, 65, was convicted of 12 counts of securities fraud, five counts of making false statements to auditors, one count of insider trading and one count of conspiracy in 2006 for his role in hiding debt and orchestrating a web of financial fraud that ended in the Houston company’s bankruptcy.

He was sentenced to 24 years in prison and fined $45 million, the harshest sentence of any former Enron executive. Six years ago, Skilling’s sentence was reduced to 14 years by U.S. District Judge Sim Lake.

See here for more on Skilling’s release to the halfway house last year. One of the conditions of his release then was that he had to get a job, but I’m not able to find any information about what that might have been. If he eventually winds up on the speaking circuit like Andy Fastow, I won’t be surprised. In the meantime, I don’t know what there is to make of this news. He did his time and now he’s out, and we’re all that much older. I wonder how long it will be before we see his name in the news again.

Jeff Skilling released from prison

It’s the end of an era.

Jeffrey K. Skilling, the former Enron CEO sentenced to a long prison term for his role in one of most notorious corporate fraud cases in history, was recently released from a minimum security federal prison camp in Alabama to a halfway house at an undisclosed location.

Enron’s spectacular collapse cost investors billions of dollars and wiped out the retirement savings — not to mention the jobs — of thousands of employees. Skilling, 64, was convicted of 12 counts of securities fraud, five counts of making false statements to auditors, one count of insider trading and one count of conspiracy in 2006 for his role in hiding debt and orchestrating a web of financial fraud that ended in the Houston company’s bankruptcy.

He was sentenced to 24 years in prison and fined $45 million, the harshest sentence of any former Enron executive. Five years ago, Skilling’s sentence was reduced to 14 years by U.S. District Judge Sim Lake. He is scheduled to be released Feb. 21, 2018, according to the Bureau of Prisons.

Federal prisoners are often released from prison several months early to a halfway house, a highly restricted dormitory-like setting that helps inmates ease back into society. They must maintain curfews, find work and stay out of trouble. A. Kelley, assistant residential re-entry manager for the Bureau of Prisons in San Antonio, said the bureau would not say where Skilling is living.

Been while since there was Enron news. The last post I have is this Andy Fastow update from 2015, and before that this story about Skilling’s sentence being reduced from 2013. Apparently, as part of the early release (I presume they mean 2019 in the story), Skilling has to get a job. One can only imagine the possibilities. I don’t have anything else to add here, just that this is the end of an era of sorts.

Skilling gets resentenced

He got the minimum of what he could have gotten.

The long-running battle between federal prosecutors and former Enron CEO Jeff Skilling formally came to an end Friday when U.S. District Judge Sim Lake signed off on a negotiated sentence agreement that will end Skilling’s incarceration in about four years.

In agreeing to the minimum sentence within the range of 168 and 210 months, Lake said the interest of justice would not be served by having Skilling serve longer. He noted that the architect of Enron’s rise from an obscure pipeline company to an innovative and diverse energy giant will end up spending more time in prison than anyone else connected to the company’s stunning 2001 collapse into bankruptcy.

“This is not an easy decision to make,” Lake said about the number of months to choose.

“The two most significant factors are the need for the sentence to deter others from similar action and to reflect the seriousness of the offense — 168 months adequately reflects both concerns. The court is not persuaded a longer sentence is necessary.”

Appellate reversals of part of the government’s case against Skilling, as well as one of grounds used by Lake in setting the original sentence of 24 years, meant that Skilling already was entitled to a reduced sentence. The agreement knocked about 20 months off the lower end of the revised sentence range, in exchange for which Skilling agreed to forgo any further appeals.

That finality, which brings the Enron saga to a close, frees up about $40 million in Skilling’s assets to be divided among investors, protects the government from the possibility of more appeals reversals and assures Skilling of at least the possibility of having an extended period of time as a free man before he dies.

See here and here for the background. 168 months is 14 years, but he’s been in the clink for seven already, so as noted in my previous post he’d be freed in 2020. All things considered, a reasonable deal for everyone involved, though some former Enron workers are not happy about it.

Skilling’s sentence shortened

Jeffrey Skilling’s day in court will come to an end.

Responding to a federal appeals court mandate, lawyers for former Enron CEO Jeff Skilling and the U.S. Department of Justice Wednesday reached an agreement that could knock a decade off the disgraced CEO’s 24-year sentence.

Skilling, 59, was convicted in 2006 of conspiracy, securities fraud, making false statements to auditors and one count of insider trading in connection with the energy company’s 2001 collapse.

The new agreement provides for a jail term of 14 to 17 years and a financial penalty of $40 million. He would be credited for time already served. Skilling’s sentencing is set for June 21 in Houston.

“Today’s agreement will put an end to the legal battles surrounding this case,” Justice Department spokesman Peter Carr said. “Mr. Skilling will no longer be permitted to challenge his conviction for one of the most notorious frauds in American history, and victims of his crime will finally receive the more than $40 million in restitution they are owed.”

See here for the background. Counting time served, which I presume began in 2006, would make him eligible for parole as early as 2020, which isn’t exactly soon but is a lot sooner than 2030. Fine by me, I guess. Hair Balls has more.

Skilling might get a sentence reduction

But don’t expect him to get out of jail anytime soon.

Attorneys for former Enron CEO Jeff Skilling and the Department of Justice are discussing an agreement to reduce his prison time and possibly avert a drawn-out court battle.

Those involved didn’t disclose Thursday how much his 24-year sentence might be shortened through a settlement, though appeals court rulings in 2009 and 2010 made some reduction likely.

“I don’t suspect that that sentence is going to let Skilling out of jail anytime soon,” said Bill Mateja, former senior counsel to the U.S. attorney general. “I would suspect that there’s going to be some reduction, but certainly he’s going to spend a significant time in prison.”

Skilling, who has served six years, was convicted in 2006 of conspiracy, fraud and insider trading for his role in the collapse of the Houston energy company.

[…]

The Justice Department issued a notice to victims on Thursday about the talks with Skilling’s attorneys and invited those affected by the case to file comments about a possible sentencing deal.

“The Department of Justice is considering entering into a sentencing agreement with the defendant in this matter,” said the notice on the Justice Department’s website. “Such a sentencing agreement could restrict the parties and the court from recommending, arguing for, or imposing certain sentences or conditions of confinement. It could also restrict the parties from challenging certain issues on appeal, including the sentence ultimately imposed by the court at a future sentencing hearing.”

The notice describes potential victims as “thousands of former Enron employees, owners of Enron securities and other persons who were harmed as a result of the crimes for which the defendant will be sentenced.”

A Justice Department official said Thursday evening that the government’s goal “is to ensure that Mr. Skilling be appropriately punished for his crimes, and that victims finally receive the restitution they deserve.”

U.S. District Judge Sim Lake held a private conference call with attorneys from both sides last month about the potential deal. Skilling has been waiting to be re-sentenced after a federal appeals panel in 2009 ruled his sentencing was too harsh.

“Because of the complexity of the case and its age, I think it’s probable both parties felt that it was best to come up with a negotiated compromise,” said Houston lawyer Philip Hilder, a former federal prosecutor. “A full-blown sentencing hearing would require a lot of resources and would be time-consuming and difficult because of the age of the case.”

Maybe you can blame sequestration for that. Skilling asked for a new trial last year, claiming to have “new evidence” that would exonerate him. His conviction was upheld in 2011 after a SCOTUS review of his case, but the Fifth Circuit Court of Appeals ordered him to be re-sentenced in 2009 as part of the original ruling that upheld his conviction. These things do take time, don’t they? Skilling is the last of the Enron defendants still entwined in the justice system. We’ll see what happens.

Skilling asks for new trial

Good luck with that.

Former Enron CEO Jeffrey Skilling’s appellate battle apparently will continue with what his attorney says is “newly discovered evidence.”

In a motion for a time extension filed last week, Daniel Petrocelli asked to have until August 17 to submit Skilling’s latest brief. The two-page motion refers to Skilling’s intent to ask for a new trial based on the new evidence but includes no description of what the evidence is.

A hearing on the request for more time will be held June 7 before U.S. District Judge Sim Lake.

[…]

Last month, the U.S. Supreme Court turned down Skilling’s request for a new trial that had been based on its previous ruling tossing out one of the legal theories used to convict him.

Skilling had appealed to the Supreme Court after the U.S. 5th Circuit Court of Appeals ruled that the theory in question — an “honest services” statute that the high court had said was inappropriate for this type of case — amounted to a “harmless” error and there was plenty of evidence to support his conviction on other grounds.

More here.

The attorney for convicted Enron CEO Jeff Skilling said Friday his motion for a new trial will hinge on documents produced by the government after the 2006 trial – familiar territory that he has long insisted show prosecutors repeatedly withheld evidence favorable to the defense.

While not citing the specific documents that he claims are “exculpatory,” attorney Daniel Petrocelli told U.S. District Judge Sim Lake during an open-court telephone conference that his argument will center on notes of government interviews with former Enron executives as well documents related to the so-called Global Galactic memo that former Enron executive Andrew Fastow purportedly put together outlining the company’s dealings with off-the-books partnerships designed to conceal the extent of Enron’s debt.

“It all comes from the (earlier) material provided for the appeal,” Petrocelli said. “There were two or three productions of evidence, and all the material comes from those productions.”

On the one hand, I can’t claim to have any sympathy for Jeff Skilling. On the other hand, I believe the post-conviction appeals process has become far too burdensome, with too many obstacles placed in the path of convicts with meritorious claims. We’ve also seen far too many cases lately of prosecutors being caught not disclosing potentially exculpatory evidence. As such, if he really does have new evidence I hope Skilling gets the opportunity to present it. Even better, I hope he sets a precedent that helps clear the way for other appellants. We’ll see how it goes.

Enron, ten years after

Ten years ago today, on December 2, 2001, Enron officially collapsed. Apparently, you can buy some memorabilia cheap on eBay, which is fitting in a weird way. The Chron had a bunch of Enron look-back stories on Sunday to commemorate. Where are all of the defendants now? With the exception of Jeff Skilling, they’re all pretty much disentangled from the justice system. Even Andy Fastow‘s sentence is up this month. Employees who lost their retirement funds wish it were that neat for them. And of course, as a country we basically learned nothing from the Enron experience. Isn’t that usually how it goes?

Skilling conviction upheld

Some Enron news for you:

A U.S. Supreme Court decision does not undo any of the convictions against former Enron CEO Jeffrey Skilling, but his case should still be sent back to a Houston judge for resentencing, an appeals court said on Wednesday.

Last June the Supreme Court ruled that one of the theories behind Skilling’s 2006 jury conviction for conspiracy — the honest-services fraud theory — should not have been used in instructions given to the jury. The high court sent the issue back to the 5th U.S. Circuit Court of Appeals to determine if the use of the theory invalidated any of the charges.

In a ruling filed Wednesday afternoon the 5th Circuit said it found the error “harmless” and affirmed the convictions. See the document below.

Skilling will still be resentenced by U.S. District Judge Sim Lake, however, based on a prior ruling from the appeals court that the Houston judge applied federal sentencing guidelines improperly.

You can see the ruling here. Tom Kirkendall, who has followed the appeals process for Enron defendants a lot more closely than I have and who has been a consistent critic of their prosecution, was unimpressed.

What is most striking about the Fifth Circuit’s decision is its utter vacuity. For example, the decision contends that there was “overwhelming evidence” that Skilling committed securities fraud by engaging in fraudulent accounting in regard to several Enron units. But the decision fails to cite any of the supposedly “overwhelming evidence” and doesn’t even address the rather important point that the prosecution did not accuse Skilling of falsifying any of Enron’s accounting. In fact, the prosecution didn’t even put on any expert evidence that Enron’s accounting for the allegedly misleading disclosures was wrong, much less false. This tortured logic took this Fifth Circuit panel six months to generate?

Tom says that Skilling is now also able to pursue an appeal of his conviction on grounds of prosecutorial misconduct, so this matter is still far from settled. The news story says that former Enron CFO Andy Fastow is scheduled for release from prison later this year, which will be around the time of the 10th anniversary of Enron’s collapse.

Skilling’s appeal goes to SCOTUS

Jeff Skilling, the former CEO of Enron now serving jail time after being convicted on multiple charges stemming from that debacle, gets his day in the Supreme Court.

Skilling now asks the court to grapple with two issues about the four-month trial. One is whether Houston was the right place for it. Skilling argues that prejudicial pretrial publicity and the effect of Enron’s collapse on the Houston community combined to create a tainted jury pool the government could not prove was acceptable.

Second, Skilling argues the prosecutors used an unconstitutionally vague law to convict him. He was accused in some of the charges of failing to provide Enron his “honest services.” Skilling argues he was working for the benefit of his employer and that the flawed theory taints all 19 of his convictions.

[…]

Ellen Podgor, a white-collar crime expert and law professor at Stetson University College of Law, said many expect the high court to rewrite or jettison the honest services law. Two other honest services cases before the high court this term involve Conrad Black, a media mogul accused of defrauding his company, and Bruce Weyhrauch, a former Alaska legislator accused of improperly soliciting work from a business that had a matter before the lawmakers.

She said in those cases the justices pelted the government with questions about the possible vagueness of the honest services statute, and the Skilling case brings questions of its constitutionality even more squarely into focus. “One can anticipate some amount of toughness on the government on this issue,” Podgor said.

Here’s coverage of the arguments the attorneys made before the Court. I think we have a pretty good idea at this point about what kind of issues this Supreme Court really cares about. I won’t be surprised if Skilling gets at least a partial victory. Hair Balls and Tom Kirkendall have more.