February 13, 2004
Skilling in the sights

Be still my heart: Task force preparing indictment for Skilling.

An indictment against former Enron Chief Executive Officer Jeff Skilling is on the prosecutorial drawing board and could be brought to the grand jury as early as next week.

Though next week is the target, sources said the case could be postponed for any number of logistic or strategic reasons.

The specially formed Enron grand jury that will consider these charges against Skilling is nearly 2 years old and has been working more frequently as this investigation intensifies. On Thursday, it put in an eight-hour day.

The charges against Skilling being finalized by Enron Task Force prosecutors come on the heels of the Jan. 21 indictment of ex-Enron Chief Accounting Officer Rick Causey and the Jan. 15 guilty pleas of former company Chief Financial Officer Andrew Fastow and his wife.

Attorneys involved in the Enron criminal cases expect that Fastow, who agreed to serve 10 years in prison for two counts of conspiracy, gave prosecutors information that will add to the case against Skilling.

Skilling, 50, has consistently denied any wrongdoing.

I'm palpitating. With Skilling at the top of the Enron food chain (along with Kenny Boy), any indictments would almost assuredly result in a trial. There's no one left to go after, and Skilling ain't gonna plead out.

Legal experts expect Skilling, who also served as the company's chief operating officer for years, will fight any criminal charges with full force and his trial will be a high-powered slugfest.

Bruce Hiler, Skilling's Washington, D.C.-based lawyer, said his client did nothing wrong and fairly relied on his subordinates and the accountants and lawyers they hired. Hiler said if Skilling is indicted, many corporate executives need to be afraid of the government.

"If a COO can't rely on the dozens of experts who review and recommend transactions, then no COO should go to work tomorrow, because they may find themselves indicted," Hiler said.

Here's a crazy thought: Hire better experts. Maybe there's an offshoring opportunity here. That way, if you do wind up getting busted for taking their bad advice, you can at least claim you demonstrated your fiduciary responsibility to the shareholders by lowering the cost of that bad advice.

But I have to ask: When Skilling was taking the bad advice of all his experts, didn't he know enough about his own business and the law to inquire if maybe some of the arrangements being recommended to him were such good ideas? Did he really have no idea about any of the rampant looting going on around him, and if so did none of his experts think it was wise to let him in on the secret? Shouldn't a chief executive, even one who claims to be a powerless and ignorant hostage to the whims of his inscrutable advisors, still be held accountable for what those advisors whom he hired tell him to do? I know what my answer is.

Posted by Charles Kuffner on February 13, 2004 to Enronarama | TrackBack