Poised for sentencing, former Enron CEO will face demons, future alone

By Carrie Johnson

The Washington Post

WASHINGTON — When former Enron Chief Executive Jeffrey Skilling stands to face a judge and a possible decades-long prison sentence Monday, he will be, as usual, alone.

The death of company founder Kenneth Lay in July, weeks after a jury convicted both men of fraud and conspiracy charges for misleading investors, means Skilling is the last person standing from the energy company’s top ranks.

It is a familiar position for a man painted by the government as both unusually self-reliant and occasionally self-destructive.

The single-mindedness that made Skilling a successful management consultant and a masterful corporate strategist powers his vow to go forward with an appeal.

Skilling, who told jurors he was “absolutely innocent,” is attacking the four-year investigation against him as a “witch hunt” and claiming that prosecutors used unfair tactics and relied on shaky jury instructions to bring down a man who once dashed from presidential inaugurations to conference calls with Wall Street analysts.

But it is very much an open question whether U.S. District Judge Simeon Lake will let Skilling, 52, remain free pending an appeal, as defense lawyers requested, or whether he will be ordered into Bureau of Prisons custody immediately Monday afternoon.

The judge closed the book on the criminal case against Lay on Tuesday by tossing out his conviction on 10 charges because Lay died before he could appeal.

Thus, people who lost money in Enron’s demise will watch what happens to Skilling with great interest.

Among the representatives for Enron’s victims who have asked to speak Monday is a lawyer for employees who lost what they say is more than $1.3 billion through the company’s stock-heavy savings plan.

The former employees “have all been condemned to many more years of labor to try and rebuild the hard-earned financial security that was stolen from them,” the lawyers wrote in court papers last week. “Their lives have been shattered in ways that most Americans are fortunate to have never experienced.”

Skilling, a graduate of Harvard Business School, transformed the Houston energy company from a stodgy pipeline business to a cutting-edge technology trader in the 1990s.

After becoming CEO in early 2001, he was increasingly isolated from the opportunistic, hard-charging executives he called friends during his rise to power.

His best friend, former Enron deal maker Clifford Baxter, committed suicide in 2002 as the criminal investigation widened. His closest associates — including master salesman Kenneth Rice, youthful protégé David Delainey and finance chief Andrew Fastow — all turned on him, pleading guilty and providing damning testimony that helped persuade a jury to convict Skilling in May.

“I can’t say that I have a lot of very close, personal relationships with people,” Skilling told the jury.

At one point, Skilling testified, he was so overcome with emotion and drink that his future wife, former Enron corporate secretary Rebecca Carter, could not roust him out of a hotel room to meet friends and attend a boat show.

Although she sometimes appeared in court during the 16-week trial, Carter did not show up when the judge read aloud 19 guilty counts against Skilling on May 25.

Two months after his indictment, New York City police took him to the hospital after passers-by reported a disturbed person on the street.

Last month, Dallas police took him into custody on a misdemeanor public-intoxication charge.

Herbert Hoelter, a prison consultant who has advised Martha Stewart and Adelphia Communications founder John Rigas, said the pressures on former executives facing prison are weighty.

Executives who once exerted control over thousands of employees now look at the prospect of being told when to eat, when to report to work, and when to go to sleep.

They must make their peace with their families and face such questions as “will I see my son graduate from high school or college?” Hoelter said.

In that context, Hoelter said, Skilling’s recent brush with the law makes more sense.

“It’s certainly, in my book, very understandable. If I was facing this, who knows what relief you seek?”