- The Washington Times - Wednesday, February 18, 2004

HOUSTON (AP) — Jeffrey Skilling, the former Enron Corp. chief executive officer who resigned less than four months before the company imploded in scandal, is expected to surrender today on charges related to the company’s collapse, sources told the Associated Press.

The criminal charges come almost two years after Mr. Skilling told Congress he knew nothing about serious problems at the energy trader.

Two sources close to the investigation, who spoke on the condition of anonymity, said yesterday that Mr. Skilling is expected to surrender to the FBI early today and then appear before a federal judge on charges related to Enron’s collapse.

It was not immediately clear what charges Mr. Skilling would face, although the sources said they would likely be conspiracy and fraud.

Barring any last-minute delays, Mr. Skilling, 50, will be the highest-profile former Enron executive to face criminal charges. One of his attorneys, Bruce Hiler, went to the federal courthouse in Houston yesterday afternoon to familiarize himself with its layout.

Mr. Skilling’s former boss, Enron founder and former Chairman Kenneth Lay, has not been charged, and the sources said it was unclear when or if he would become a defendant.

Both men, through their attorneys, have staunchly maintained their innocence since Enron collapsed and went bankrupt in December 2001.

Two years ago, Mr. Skilling insisted during testimony before two congressional panels that he believed Enron was financially healthy when he abruptly quit after only six months as CEO, citing personal reasons he has not explained. Other former executives, including Mr. Lay, invoked their Fifth Amendment rights and declined to testify before Congress.

Mr. Skilling has been publicly silent since 2002, letting his attorneys speak for him.

Mr. Skilling would be the 28th individual to be charged and one of the most anticipated in the Justice Department’s methodical investigation, which passed its two-year mark last month.

It also would come just a month after former Enron finance chief Andrew Fastow pleaded guilty to two counts of conspiracy and agreed to help prosecutors pursue other cases.

Fastow was one of Mr. Skilling’s first hires shortly after Mr. Skilling joined Enron in 1990. In his guilty plea, Fastow 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.

Fastow’s attorneys said when he was indicted on nearly 100 counts in October 2002 that he was hired to do off-the-books financing and that Enron’s top officers and directors approved and praised his work.

The sources said Mr. Skilling likely would be charged with conspiracy and fraud, as were Richard Causey, Enron’s former top accountant who, like Fastow, reported directly to Mr. Skilling.

Mr. Causey pleaded not guilty and, unlike Fastow, is not accused of skimming millions of dollars for himself through self-dealing.

But all the top executives, including Mr. Skilling, pocketed millions of dollars from sales of stock that prosecutors said was inflated. Enron shares reached a high of $90 in August 2000.

The main contention in a conglomerate of federal shareholder lawsuits in Houston says Mr. Skilling gained more than $70 million from selling 1.3 million shares of stock — about 43 percent of his holdings — from June 1996 through November 2001. Mr. Skilling also received $13.2 million in bonuses from 1997 through 2001.

Mr. Skilling has said his stock sales were part of an ongoing program to sell a certain amount each month, and he did not dump shares for fear of Enron going under.

Mr. Skilling graduated from Southern Methodist University in Dallas, earned a master’s degree from Harvard Business School and joined consulting firm McKinsey & Co. in Houston in 1986. His theory of applying finance principles to trading in the newly deregulated natural-gas business prompted Mr. Lay to hire him.

Enron’s trading operations grew under Mr. Skilling’s leadership, prompting other energy companies to imitate the company’s apparent success. In 1997, Mr. Skilling became chief operating officer. He stepped into the CEO position in February 2001.

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