US: Ex-Enron Boss Charged with Fraud

Publisher Name: 
Guardian (London)

Jeff Skilling, the former chief executive of Enron, has been charged with 42 counts of fraud, insider trading and giving false statements to auditors in a federal indictment released today. The indictment also includes new charges against former Enron chief accounting officer, Rick Causey, who pleaded not guilty to six fraud counts last month.

The charges come after Mr Skilling, 50, surrendered himself to the FBI at their headquarters in Houston, Texas, accompanied by his lawyers.

Citing personal reasons, Mr Skilling resigned from Enron in August 2001, four months before the company filed for bankruptcy. His abrupt departure from Enron marked the beginning of the end for the energy company that had won plaudits on Wall Street for its "innovative" financial practices.

Enron's collapse, the first in a series of financial scandals that rocked Wall Street and corporate America, also embarrassed the White House because of the company's close ties with the Bush administration. Enron, based in Houston, was a big contributor to Mr Bush's presidential election campaign.

Mr Skilling is the most senior Enron executive so far to face criminal charges. He is the 28th individual to be charged in a two-year federal investigation, which passed its two-year mark last month.

In 2002, Mr Skilling maintained during testimony before two congressional panels that he believed Enron was financially healthy when he stepped down. Mr Skilling's former boss, Enron founder and former chairman Kenneth Lay, has not been charged.

Mr Skilling handed himself in just a month after former Enron finance chief Andrew Fastow pleaded guilty to two counts of conspiracy and agreed to help prosecutors. He is now out on bail pending formal sentencing and faces a maximum of 10 years.

Mr Fastow, who was hired by Mr Skilling admitted that he and others manipulated Enron's books so the company would appear successful while using various partnerships to enrich himself, his family and chosen colleagues. When he was indicted on nearly 100 counts in October 2002, Mr Fastow's lawyers said he was hired to do off-the-books financing and that Enron's top brass approved and praised his work.

A week after Mr Fastow's plea, former Enron chief accounting officer Rick Causey was indicted on six fraud counts, but he pleaded not guilty and was released on $1m bail. Mr Causey's indictment mentioned that Mr Lay and Mr Skilling, identified by title rather than name, were among "the principal managers of Enron's finances" and accused Mr Causey "and others" of lying about earnings.

Mr Skilling joined Enron in 1990 and quickly moved up the company. He was promoted to chief executive officer in February 2001, replacing Mr Lay, who stayed on as chairman. He helped transform Enron from a staid pipeline company into a trader that combined the energy business with new technologies at the height of the internet boom.

At its zenith, Enron was the seventh largest company on the Fortune 500 list. But in August 2001, after just six months, Mr Skilling suddenly resigned, saying he wanted time to enjoy life.

AMP Section Name:Corruption