Ex-Enron CEO gets 10 years cut from sentence

Houston • One of the country's most notorious financial scandals came to a protracted legal conclusion Friday as the prison sentence of ex-Enron Corp. CEO Jeffrey Skilling was reduced by 10 years after a federal judge approved a deal between his lawyers and prosecutors.

Skilling, already in prison in Colorado for spearheading the pervasive fraud that destroyed the energy company, with time off for good behavior and other factors could be released in 2017, his attorney say.

Skilling, 59, has been incarcerated since 2006, when he was sentenced to more than 24 years by U.S. District Judge Sim Lake. But an appeals court vacated his prison term in 2009, ruling that a sentencing guideline was improperly applied. That meant a reduction of as much as nine years.

However, Skilling's resentencing was delayed for years as he unsuccessfully sought to overturn his convictions, including appealing to the U.S. Supreme Court.

The Justice Department said that in an effort to resolve a case that's gone on for more than 10 years, it agreed to an additional reduction as part of a deal to stop Skilling from filing any more appeals. Federal prosecutors say the deal will allow for the distribution of $41.8 million of Skilling's assets in restitution to victims of Enron's 2001 collapse.

Even with the reduced sentence, Skilling's prison term is still the longest of those involved in the Enron scandal. He was the highest-ranking executive to be punished. Enron founder Kenneth Lay's similar convictions were vacated after he died of heart disease less than two months after his trial.

Skilling declined to make statements during Friday's resentencing hearing.

He was convicted on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of Houston-based Enron. The company, once the seventh-largest in the U.S., went bankrupt under the weight of years of illicit business deals and accounting tricks.

A one-time visionary, Skilling was vilified by many former Enron employees for denying any wrongdoing.

Former Enron worker Diana Peters, the only victim who spoke at the resentencing hearing, said employees gave their hard work, spirit and trust to Skilling and others at Enron.

"Jeff Skilling betrayed that trust to those employees and played a part in the financial collapse of an amazing company," Peters said.

The U.S. Supreme Court said in 2010 that one of Skilling's convictions was flawed when it sharply curtailed the use of the "honest services" fraud law — a short addendum to the federal mail and wire fraud statute that makes it illegal to scheme to deprive investors of "the intangible right to honest services."

The high court ruled that prosecutors can use the law only in cases where evidence shows the defendant accepted bribes or kickbacks, and because Skilling's misconduct entailed no such things, he did not conspire to commit honest services fraud.

The Supreme Court told a lower court to decide whether he deserved a new trial; the lower court said no.

Enron's collapse put more than 5,000 people out of work, wiped out more than $2 billion in employee pensions and rendered worthless $60 billion in Enron stock. Its aftershocks were felt across the city and the U.S. energy industry. —

The trade-off

In exchange for his reduced sentence, Jeffrey Skilling gave up $42 million, which will be distributed to victims of Enron's fraud. He also agreed not to pursue any further legal appeals.