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Jeffrey Keith Skilling (born November 25, 1953) is the former CEO of Enron Corporation, who was convicted of federal felony charges relating to Enron's financial collapse. Skilling, who headed Enron from February to August 2001, surrendered to the Federal Bureau of Investigation on February 19, 2004 in connection to the fraud charges against Enron and Skilling's predecessor/successor in the CEO position, Kenneth Lay.
After a 56-day trial ending with a jury verdict on May 25, 2006, Skilling was found guilty of 19 out of 28 counts against him, including one count of conspiracy, one count of insider trading (although he was acquitted of the other nine counts of this particular charge), five counts of making false statements to auditors, and twelve counts of securities fraud. Each conviction carries a maximum sentence of 5 to 10 years.
Court observers estimate Skilling faces at least 25 years in prison for having used off-the-books partnerships to manipulate Enron's finances, as well as additional jail time for using inside information to sell Enron stock.
Personal life
Skilling was born in Pittsburgh, Pennsylvania the second of four children. He grew up in New Jersey and Aurora, Illinois. When he was 13, he was the chief production director for a public-access cable television station in Aurora.
After graduating from West Aurora High School (where he graduated number 16 in a class of 600), Skilling received his B.S. in applied science at Southern Methodist University (1975), where he was a member of Beta Theta Pi. During his admissions interview for Harvard Business School, he was asked, "Are you smart?" - to which he famously replied, "I'm fucking smart". Skilling earned his M.B.A. from Harvard in 1979, graduating in the top five percent of his class. He became a consultant at McKinsey & Company in the energy and chemical consulting practices.
Skilling has a 21-year-old daughter, a 20-year-old son, and a 15-year-old son from his first marriage, which ended in divorce in 1997. In March 2002, he married Rebecca Carter, a former vice president for board communications and board secretary at Enron. Skilling is the younger brother of Tom Skilling, a popular meteorologist in Chicago, Illinois.
Skilling had a breakdown on the streets of New York City in April 2004. After an evening of excessive drinking he began to harass people on the street and began to accuse total strangers of being FBI agents. Police responding to the 911 calls found him uncooperative and concluded that he was an emotionally disturbed person in need of emergency assistance.
Enron
As a consultant for McKinsey & Company, Skilling worked with Enron in 1987, helping the company create a forward market in natural gas. Skilling impressed Kenneth Lay in his capacity as a consultant, and was hired by Lay in 1990 as chairman and chief executive officer of Enron Finance Corp. In 1991, he became the chairman of Enron Gas Services Co., which was a result of the merger of Enron Gas Marketing and Enron Finance Corp. Skilling was named CEO/managing director of Enron Capital & Trade Resources, which was the subsidiary responsible for energy trading and marketing. He was promoted to president and chief operating officer (second only to Lay) of Enron in 1997, while remaining the head of Enron Capital & Trade Resources. In 1999, Enron launched EnronOnline, an Internet-based trading operation, which was used by virtually every energy company in the U.S.
On February 12, 2001, Skilling was named CEO of Enron. Skilling began to behave strangely during this time and in April 2001 verbally attacked Wall Street analyst Richard Grubman, who questioned Enron's unusual accounting practice during a recorded conference call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling replied "Well, thank you very much, we appreciate that . . . asshole." Though the comment was met with dismay and astonishment by press and public, it became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling's lack of tact.
Jeffery Skilling became the COO of the Enron Corporation in 1990, pushing a strange idea: the company didn't really need any "assets". By pushing the company's aggressive investment strategy, he helped make Enron the nation's biggest wholesaler of gas and electricity, with $27 billion traded in the first quarter. He became the CEO, and personally earned $132 million in a single year.
Skilling unexpectedly resigned on August 14 of that year, citing personal reasons, and he soon sold large blocks of his shares in the corporation. Then Enron Chairman Kenneth Lay, who previously served as CEO for 15 years, replaced him until the company declared bankruptcy in December of 2001. When brought in front of congressional committees, he stated that he had "no knowledge" of the complicated chain of scandal that would eventually result in Enron's bankruptcy.
On March 28 2001, PBS's Frontline interviewed Skilling, where he claimed Enron was one of "the good guys".
Indictment and trial
Skilling was indicted on 35 counts of fraud, insider trading, and other crimes related to the collapse of Enron. He pleaded not guilty to all charges. The main reason for his arrest was his probable knowledge of the fraudulent transactions within Enron. About a month after quitting Enron, Skilling sold almost $60 million of his stake in the company (in blocks of 10,000 to 500,000 shares), leading to the prosecutors' allegation that he sold those shares with inside information of Enron's impending bankruptcy. Skilling's attorney is Daniel Petrocelli, the 52-year-old civil litigator who represented Ron Goldman's father against O.J. Simpson in civil suit. Skilling spent 40 million USD in preparation for the trial. Skilling's younger brother Mark is an attorney and assisted his legal team during the criminal trial.
The trial commenced on January 30, 2006 in Houston, despite repeated protests from defense attorneys calling for a change in venue on the grounds that "it was impossible to get a fair trial in Houston – the epicenter of Enron's collapse. Enron's bankruptcy, the biggest in U.S. history when it was filed in December 2001, cost 4,000 employees their jobs and many of them their life savings. Investors lost billions." On May 25, 2006 Skilling was found guilty on 19 counts of conspiracy, fraud, false statements and insider trading. He was found not guilty on nine counts of insider trading. Skilling, known for his arrogance and harsh attitude, came off in a mostly positive light, though he did lose his temper on the stand. Sentencing will take place during the week of September 11, 2006.
Trivia
- Skilling was recruited to Enron by fellow Beta Theta Pi fraternity brother Ken Lay.
See also
External links
- Jeffrey Skilling at Forbes.com
- Jeffrey Skilling's political donations
- Jeffrey Skilling Pied by the BBB
Media appearance
References
- "Enron Chiefs Guilty of Fraud and Conspiracy". New York Times. Retrieved 2006-05-27.
- "Enron's Lay, Skilling Convicted of Conspiracy and Fraud Charges". Bloomberg. Retrieved 2006-05-29.
- "Former Enron CEO may have lost it". Capital News 9. Retrieved 2006-05-27."Enron Big: Harasser Or Harassed?". CBS News.
- "Skilling comes out swinging". Money/CNN. April 10, 2006.
- "Blackout Program #1916 Transcript". PBS. Retrieved 2006-05-27.
- "Lay and Skilling's day of reckoning". CNN. Retrieved 2006-05-27.