The 4,500 employees who lost their jobs in 2001 have waited a long time for an indictment.
By KRIS HUNDLEY
Published February 19, 2004
HOUSTON - Federal prosecutors reportedly are poised to formally charge Enron's former chief executive officer, Jeffrey Skilling, with masterminding an elaborate accounting scheme that hid the corporation's debt, overvalued its assets and manipulated its earnings to boost the stock price.
It might happen as early as today. Late Wednesday the Associated Press quoted unidentified sources close to the investigation as saying Skilling, 50, was expected to surrender to the FBI early today and appear before a federal judge on charges related to Enron's collapse.
Houston is abuzz.
After nearly two years of little public progress on the investigation into Enron's financial collapse, former Enron employee Diana Peters knows where she wants to be when Skilling is brought into this city's federal court on a formal indictment.
"I will be in the front row," said Peters, one of the more than 4,500 Enron employees who lost their jobs when the energy and trading powerhouse filed for bankruptcy in late 2001. "And I'll be wearing colorful clothes, like the kind you wear to a party."
Peters might have plenty of company. Ex-Enroners in this sprawling metropolis are swapping e-mails, fielding calls from reporters and preparing to party.
"I think it's great," said Adam Plager, a 35-year-old former Enron software developer who has gone on to start his own company. "A lot of people are frustrated by the time it took for the government to get an indictment. But I'm glad they took the time and did it right so Skilling doesn't get off on a technicality."
Skilling succeeded Kenneth Lay as Enron's chief executive in early 2001. He resigned the position several months later, a move that set off deep public questioning of the company's financial position. Accounting problems rapidly emerged, and within four months, Enron was bankrupt.
All the top executives, including Skilling, pocketed millions of dollars from sales of stock prosecutors allege was inflated. Enron shares hit a high of $90 in August 2000.
Momentum in the case against Skilling and Lay has been building since mid January. It was then that Andrew Fastow, the company's former chief financial officer, pleaded guilty to two counts of conspiracy and received a 10-year sentence in exchange for his cooperation with prosecutors.
About 10 days after Fastow's plea bargain, Richard Causey, Enron's former chief accounting officer, was indicted on securities fraud and conspiracy charges. Lay's and Skilling's job titles, but not their names, were listed under the "defendant" section of the Causey indictment. No potential timetable has been discussed for an indictment of Lay.
Lay and Skilling, who had been Enron's chief operating officer from 1997 before becoming chief executive in early 2001, have repeatedly denied wrongdoing. Skilling's lawyer, Bruce Hiler of Washington, D.C., has said if Skilling is indicted, many executives need to be afraid of the government.
"If a COO can't rely on the dozens of experts who review and recommend transactions, then no COO should go to work tomorrow, because they may find themselves indicted," Hiler said.
While charges against Skilling might strike fear in the hearts of top executives, they will bring a measure of satisfaction to Enron's rank-and-file workers.
"I'm trying to get some closure on Enron, so I don't dwell on it," said Linda Walker, a 52-year-old receptionist with the company for 30 years. "But this corruption destroyed a lot of people. I believe God will make a difference and they will get their punishment."
Shane Yelverton, a 55-year-old administrative assistant who has worked a series of contract jobs since losing her position with Enron, tries not to feel revengeful when she thinks of Skilling.
"I'm a Christian, so I'm not supposed to hold grudges," she said. "But when Jeff Skilling and Ken Lay are in jail, at least for a little while, I'll be glad. I'm sorry, but I will be."
David Tonsall had been a senior project engineer with Enron for nearly five years when he and thousands of other employees were escorted out of the company's downtown high-rise office towers that morning in early December 2001. Included was his wife, a project manager with Enron for less than a year.
"People want to see justice," Tonsall said. "But these were smart men and the government won't find the papers that were shredded."
Some former employees say they're not certain Skilling is necessarily to blame for the Enron debacle. Eric Eden ran a computer drafting department at Enron for eight years. He's freelancing now, and is marketing a lawn sprinkling system he invented.
"I think Skilling drove the company to failure and his vision had flaws," Eden said. "But I want to think he did it with the best of intentions."
Rod Jordan, a former manager who organized a network of ex-Enroners that successfully lobbied to be represented at the company's bankruptcy proceedings, sees another side.
"If Skilling and Lay turn out to be innocent, and the problems at the company just rose to the level of Fastow, that would mean the failure of the Enron experiment was not that great," said Jordan, 65. "I'd love to end up believing in someone at Enron. But I don't see how."
- Information from wire stories was used in this report. Kris Hundley can be reached at hundley@sptimes.com or 727892-2996.
