Ex-CEO self-assured during career, trial

Associated Press / May 26, 2006
  • Email|
  • Print|
  • Single Page|
  • |
Text size +

HOUSTON -- Former Enron Corp. chief executive Jeffrey Skilling never saw himself as a potential felon.

``I'm very confident. I'm innocent," he said outside the federal courthouse in Houston a day before a federal jury began deliberating his fate along with that of Enron founder Kenneth Lay.

Yesterday, that jury disagreed. The panel convicted Skilling of 19 counts of fraud, conspiracy, insider trading, and lying to auditors.

A subdued Skilling told reporters after the verdict he was disappointed, ``but that's the way the system works."

During 7 1/2 days of grueling testimony during the trial, and even as he learned he'd been found guilty of most counts against him, Skilling appeared as self-assured as he did in the 11 years he spent at Enron before abruptly resigning more than three months before the company crumbled in December 2001. Enron spiraled into bankruptcy protection amid accusations of accounting tricks, leaving thousands jobless and wiping out billions of dollars from investors.

Prosecutors said both Skilling and Lay repeatedly lied to investors and employees about Enron's financial health when the company's success actually stemmed from fudged finances.

Skilling countered that the company was sunk by bad publicity paired with lost confidence in a stock market made skittish by the Sept. 11, 2001, terror attacks.

``I know of no reason Enron would have to resort to fraud," he told jurors.

Skilling, 52, a self-described nerd, was born in Pittsburgh and raised in New Jersey and suburban Chicago. The son of a mechanical engineer who sold valves, Skilling excelled in public schools, and earned a full scholarship to Southern Methodist University. He later attended Harvard Business School and became a star at consulting firm McKinsey & Co.'s Houston office.

Lay embraced Skilling's vision of applying banking principles to the deregulated natural gas industry and enticed him to join Enron in 1990. Skilling led Enron's transformation from a staid pipeline company into a powerhouse trader that spawned wannabes throughout the merchant energy industry.

Lay ceded the chief executive position to him in February 2001. Skilling abruptly quit six months later. Prosecutors said he bailed out because he knew Enron was doomed. Later disclosures of inflated profits and hidden debt caused many to look twice at Skilling, known at Enron as an intense, hands-on manager who inspired fear and respect in demanding double-digit earnings growth.

Skilling testified he quit because he was worn out and had neglected his family. In 1997, he divorced the mother of his three children, and married his second wife in March 2002.