A criminal indictment against former Enron Corp. CEO Jeffrey Skilling apparently may be brought to the federal grand jury in Houston within the next few days, sources close to the U.S. Justice Department indicated Friday. The department has had various ex-executives of Enron under the microscope for more than two years, but an indictment of Skilling, 50, would target the highest level executive yet.

One source told the Houston Chronicle that an indictment against the former CEO and long-time president could come on Thursday. Skilling joined Enron in 1990 and was instrumental in transforming the company from a conservative pipeline operator to the leading energy merchant in the world. Skilling had been chief operating officer for four years before being named CEO in early 2001. However, he resigned for personal reasons about six months later, just a few months before Enron collapsed into bankruptcy (see Daily GPI, Aug. 15, 2001).

In testimony before a congressional subcommittee in February 2002 Skilling denied knowing that Enron’s special purpose entities (SPEs) that led to the company’s collapse were intended to hide debt and boost earnings. He said in testimony that in his time at Enron, “I was not aware of any financial arrangements designed to conceal liabilities or inflate profitability.” The SPE partnerships, he said, are “commonplace in corporate America.”

In response to repeated questions from House subcommittee members, Skilling said that when he left the company, “I absolutely and unequivocally thought the company was in good shape” (see Daily GPI, Feb. 8, 2002).

Prosecutors apparently have been working with former CFO Andrew Fastow on the Skilling case. Fastow pleaded guilty in January to two fraud counts, and he agreed to cooperate with prosecutors in exchange for a 10-year sentence (see Daily GPI, Jan. 15).

Following Fastow’s plea, prosecutors issued a six-count indictment against Rick Causey, former chief accounting officer. Fastow and Causey, who pleaded not guilty, both reported directly to Skilling. The indictment against Causey explained his alleged role in Enron’s ability to mislead investors about the financial condition of the company.

Sources also indicated that an investigation of Kenneth Lay, former chairman, also is continuing. However, no indictment was expected against Lay in the next few weeks. Neither Skilling’s nor Lay’s attorneys could be reached for comment.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.