Ex-Enron CEO expected to surrender to FBI (Agencies) Updated: 2004-02-19 15:12
Former Enron Corp. chief
executive Jeff Skilling was expected to surrender to the FBI on Thursday
following reports he had been indicted for criminal acts in the collapse of the
former energy trading giant.
Skilling, 50, was named in a sealed indictment handed up by a federal grand
jury to U.S. Magistrate Frances Stacy on Wednesday and would turn himself in,
the Houston Chronicle reported.
He would be the highest ranking former Enron executive charged in the scandal
that rocked Wall Street and led to a wider probe of corruption in corporate
America.
Former chairman Ken Lay has not been indicted, but is under investigation,
officials have said.
Enron was the nation's largest energy trader and a political power with close
links to U.S. President Bush before it filed for bankruptcy in December
2001 amid reports that off-the-books side deals had been used to hide billions
of dollars in debt and inflate profits.
Lay and Skilling ran the company while the books were being cooked, but have
denied any wrongdoing.
The expected charges come just over a month after former Enron chief
financial officer Andrew Fastow pleaded guilty to two fraud counts in exchange
for a 10-year prison sentence.
Fastow agreed to cooperate with prosecutors, who hinted his information would
lead to charges against Skilling and Lay. Fastow is free on $5 million bail
until his formal sentencing, now set for April.
A week after 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
$1 million bail.
Causey's indictment pointedly mentioned that Lay and Skilling, identified by
title rather than name, were among "the principal managers of Enron's finances"
and accused Causey "and others" of lying about earnings.
Enron was driven to produce 15 to 20 percent earnings growth every year and
meet or exceed analysts' earnings estimates "without fail," the indictment said.
The Harvard-educated Skilling joined Enron in 1990 and quickly moved up the
corporate ladder.
In 1997, he became president and chief operating officer, then in February
2001 was promoted to chief executive officer, replacing Lay, who stayed on as
chairman of the board of directors.
He dazzled analysts, investors and journalists with his vision of deregulated
markets in which virtually anything could be a tradeable -- and profitable --
commodity.
He helped transform Enron from a staid pipeline company into a glitzy trader
that fused the energy business with new technologies at the height of the
Internet boom.
That, combined with supposedly soaring profits, helped make Enron the 7th
largest company on the Fortune 500 and pushed Enron stock from $30 in 1998 to
$90 in 2000.
But in August 2001, after just six months on the job, Skilling suddenly
resigned, saying he wanted time to enjoy life.
The move sent alarm bells through the financial world and a few weeks later
Enron began to unravel as its loose accounting led to a restatement of earnings
and a $1.2 billion writedown in shareholder equity.
Shares of Enron, which has yet to emerge from bankruptcy, closed at 8 cents
on Wednesday.
Skilling, according to published records, pocketed $15 million in stock
options in the first eight months of 2001. He lives in a mansion in Houston's
ritziest neighborhood.
In testimony before the U.S. House Energy and Commerce Committee two years
ago, he blamed Enron's demise on a liquidity crisis caused by a decline in
confidence.
"I absolutely, unequivocally thought the company was in good shape," he said.
