The Supreme Court agreed on Tuesday to reopen one of the biggest corporate scandals in US history by hearing the appeal of former Enron chief executive officer Jeffrey Skilling.
Skilling, who is serving a 24-year prison sentence and has doggedly insisted he did nothing to defraud investors, reportedly broke down in tears when he heard the news.
“Jeff is overwhelmed with joy,” lawyer Daniel Petrocelli told the Houston Chronicle.
Enron’s spectacular 2001 collapse, the largest corporate bankruptcy in history at the time, with more than US$40 billion in outstanding debt, came to epitomize corporate greed in the heady days of the Internet boom.
Skilling and Enron founder Kenneth Lay hid company losses and hyped the stock’s value while selling their own shares on the sly as the massive energy empire crumbled.
Thousands of people lost their jobs and life savings when Enron collapsed. The ensuing scandal undermined faith in corporate America and led to a massive stock market sell-off.
Followed by other mega scandals — the collapse of WorldCom, excesses at Tyco — Enron led to significant regulatory changes.
The case was also one of the most complex involving corporate crime in US legal history and represented a high-profile test for the government’s crackdown on corporate wrongdoing.
Lay died of heart failure in July 2006 before he could be sentenced and his conviction on 10 counts of fraud, conspiracy and banking violations was thrown out because his death prevented him from appealing the verdict.
Skilling, who became the poster child for corporate malfeasance, appealed his May 2006 conviction by challenging the federal law that punishes executives who fail to provide “honest services.” His lawyers argued that the statute is “vague and unenforceable” and does not require proof that the accused received a personal gain from the alleged fraud.
“The government instead alleged that Skilling took assertedly inappropriate measures to maintain or improve Enron’s stock price, in violation of his fiduciary duties of ‘honesty,’ ‘candor,’ ‘loyalty’ and ‘honest services,’” his lawyers argued in court filings.
The Supreme Court agreed in May to review the conviction of newspaper tycoon Conrad Black based on his appeal of the same honest services statutes that prosecutors have increasingly used to crack down on executives and government officials.
The former Enron chief also appealed on the basis that he did not receive a fair trial.
“Skilling was pronounced guilty throughout Houston long before trial,” his lawyers argued in court documents, noting that “the seismic effect of Enron’s collapse on Houston [was] frequently compared by residents to the September 11 attacks.”
Media coverage included “blistering daily attacks on the executives — principally Skilling and Lay — deemed responsible for Enron’s demise,” they said.
“Skilling and Lay were compared to Al-Qaeda, Hitler, Satan, child molesters, rapists, embezzlers and terrorists,” they wrote, arguing that the jury pool was “biased” and their request for a change of venue should have been approved.
They further said the “honest services” statues under which Skilling was prosecuted are “vague and unenforceable.”
A fire caused by a burst gas pipe yesterday spread to several homes and sent a fireball soaring into the sky outside Malaysia’s largest city, injuring more than 100 people. The towering inferno near a gas station in Putra Heights outside Kuala Lumpur was visible for kilometers and lasted for several hours. It happened during a public holiday as Muslims, who are the majority in Malaysia, celebrate the second day of Eid al-Fitr. National oil company Petronas said the fire started at one of its gas pipelines at 8:10am and the affected pipeline was later isolated. Disaster management officials said shutting the
DITCH TACTICS: Kenyan officers were on their way to rescue Haitian police stuck in a ditch suspected to have been deliberately dug by Haitian gang members A Kenyan policeman deployed in Haiti has gone missing after violent gangs attacked a group of officers on a rescue mission, a UN-backed multinational security mission said in a statement yesterday. The Kenyan officers on Tuesday were on their way to rescue Haitian police stuck in a ditch “suspected to have been deliberately dug by gangs,” the statement said, adding that “specialized teams have been deployed” to search for the missing officer. Local media outlets in Haiti reported that the officer had been killed and videos of a lifeless man clothed in Kenyan uniform were shared on social media. Gang violence has left
US Vice President J.D. Vance on Friday accused Denmark of not having done enough to protect Greenland, when he visited the strategically placed and resource-rich Danish territory coveted by US President Donald Trump. Vance made his comment during a trip to the Pituffik Space Base in northwestern Greenland, a visit viewed by Copenhagen and Nuuk as a provocation. “Our message to Denmark is very simple: You have not done a good job by the people of Greenland,” Vance told a news conference. “You have under-invested in the people of Greenland, and you have under-invested in the security architecture of this
Japan unveiled a plan on Thursday to evacuate around 120,000 residents and tourists from its southern islets near Taiwan within six days in the event of an “emergency”. The plan was put together as “the security situation surrounding our nation grows severe” and with an “emergency” in mind, the government’s crisis management office said. Exactly what that emergency might be was left unspecified in the plan but it envisages the evacuation of around 120,000 people in five Japanese islets close to Taiwan. China claims Taiwan as part of its territory and has stepped up military pressure in recent years, including