NEW ORLEANS (AP) - Attorneys for former Enron Corp. CEO Jeffrey Skilling say his convictions for his role in the former energy giant’s collapse were based on a flawed legal theory that he deprived Enron of his “honest services.”
His attorney told a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans that the convictions should be overturned because everything he did was in the company’s best interests.
But prosecutors told the panel yesterday that Skilling’s actions were dishonest and contrary to the needs of the company’s shareholders and its financial stability.
The appeals court is not expected to rule immediately.
Skilling and company founder Kenneth Lay were convicted in May 2006 on 19 counts of fraud, conspiracy, insider trading and lying to auditors for their role in the collapse of Houston-based Enron, once the nation’s seventh-largest company.
Lay died less than two months later, and his convictions were vacated. Skilling reported to a federal prison in Minnesota in December 2006, where he is serving a 24-year sentence. Skilling was not present for yesterday’s arguments.
Skilling is the highest-ranking executive to be punished for the accounting tricks and shady business deals that led to the loss of thousands of jobs, more than $60 billion in Enron stock value and more than $2 billion in employee pension plans after the company imploded in 2001.
The 5th Circuit has already overturned several Enron-related convictions that were based on the “honest services” theory, ruling it was flawed and that executives did only what Enron wanted them to do, and they did not profit at its expense.
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