Enron ex-chief gets 24-year jail term

Sim Lake, the US district judge, said during the sentencing on Monday that Jeff Skilling would also have to pay $45 million in restitution to Enron investors.

   

Skilling, 52, said he would appeal his conviction on 19 criminal counts.

   

In May, Skilling and Enron founder Ken Lay, who died in July, were found guilty of defrauding investors by using off-the-books deals to hide debt and inflate profits.

   

Enron, once America’s seventh largest company, collapsed into bankruptcy in December 2001, when the deals were disclosed.

   

The resulting scandal rocked Wall Street and prompted reforms in the way companies reported their finances.

Enron’s collapse also cost investors billions of dollars and caused thousands of employees to lose their jobs and retirement savings.

Remorse

 

In comments to the court before sentencing, Skilling said he was remorseful for what happened at Enron, but maintained he had committed no crime.

   

“I can’t imagine more remorse. I had friends who died, good men,” he said, appearing to choke up momentarily. “All of that being said, your honour, I’m innocent of these charges.

 

“I’m innocent of every one of these charges.”

 

Enron founder Ken Lay, who died in July, was also found guilty

As he did in testimony during his trial, Skilling blamed the demise of Enron on a credit and liquidity crunch.

   

“The company did not have enough dry power to deal with it. That, in sum and substance, is what happened in Enron,” he said.

   

He and Lay testified that the crisis of confidence that undid Enron was caused by the actions of a few rogue employees, primarily Andrew Fastow, the former chief financial officer.

   

Fastow confessed to skimming millions of dollars from the off-the-books deals he set up at Skilling’s direction. He pleaded guilty, co-operated with prosecutors and received a six-year prison sentence.

   

Longer sentence

 

Prior to sentencing, several former Enron investors and employees made “victim impact statements” in which most of them called Judge Lake for imposing the maximum sentence on him, which would have been just over 30 years.

   

“The worst mistake Ken Lay ever did was to hire you,” former employee Ann Beliveaux told Skilling. “When things got bad, you jumped ship because you knew the sky was getting ready to fall.”

 

“Enron symbolised more than any other company in the era of corporate fraud” Sean Berkowitz, prosecutor in Enron case

Charles Prestwood, another former employee, said: “I had $1.3 million and all I have to show for it is two clocks [for service awards].

   

“People think things like that don’t happen in America, but it does. It happened to us.”

        

Prosecutor Sean Berkowitz argued for a long sentence for Skilling, saying that Enron’s demise had wide-ranging effects.

   

“The integrity of the marketplace as a whole was shaken by what happened at Enron,” he said.

 

“People lost their trust and their faith in the marketplace.

   

“Enron symbolised more than any other company in the era of corporate fraud.”

But Skilling’s attorney Daniel Petrocelli argued: “We don’t need to put Skilling in jail for 25 years to send a message. Everyone on this planet has this message loud and clear.”