Former Enron Corp. CEO Jeffrey Skilling was sentenced to 24 years and four months in prison on Monday. Skilling, 52, said he will appeal.

U.S. District Judge Sim Lake, who imposed a sentence of 292 months, ordered Skilling to home confinement in Houston. Skilling must wear an ankle monitor until the Bureau of Prisons determines when he has to report to prison. Skilling may not leave his home except for medical, religious or court purposes. Lake, who presided over a hearing that lasted more than two hours, recommended Skilling serve his sentence at the Butner, NC, federal prison.

Speaking to Skilling, Lake said, “This is not an easy decision… Sentencing is the most difficult and least pleasant part of my job.” Lake acknowledged Skilling has “a family who loves him,” and noted the ex-CEO had contributed to Enron’s “early growth.” However, “as the many victims have so eloquently testified, his crimes have imposed on hundreds if not thousands, a life sentence of poverty.”

Skilling was convicted in May on 19 counts of fraud, conspiracy and insider trading (see Daily GPI, May 26). Jurors found Skilling guilty on one count of conspiracy (a joint count with Enron founder Kenneth Lay), 12 counts of securities fraud, one count of insider trading and five counts of making false statements to auditors and Enron shareholders. Skilling was acquitted on nine counts of insider trading. In the trial, Lay was found guilty of one count of conspiracy, three counts of securities fraud and two counts of wire fraud. Lake also found Lay guilty of three counts of making false statements to banks and one count of bank fraud.

Before the sentencing, Lake ruled on the conflicts in the presentencing report, which was put together by the prosecution and the defense. Lake used the 2000 Federal Sentencing Guidelines, which allow prison terms to be determined by several factors, including the amount of financial losses. Both the prosecution and defense teams stipulated that under the federal guidelines, Enron’s loss was at least $80 million.

Lake found Skilling used “sophisticated means” to commit crimes at Enron, which added time to the sentence. Lake also added time because the Enron employee pension fund was considered a financial institution.

“The court concludes that the Enron employee plans own substantial amount of Enron stock,” said Lake. “The illegal conduct of Mr. Skilling misled the investing public and kept the price of Enron stock artificially high. When the true nature was revealed,” he said, it “caused a loss of confidence.”

Lake ruled that he did not believe Skilling’s statements to the Securities and Exchange Commission (SEC) on Enron’s quarterly earnings rose to the level of perjury. However, the judge ruled Skilling had perjured himself in statements to the SEC when he sold stock in September and November 2001 (see Daily GPI, Jan. 5). Under the guidelines, Lake said before the sentencing that Skilling would face with between 292 and 365 months (24-29-plus years) in jail.

During the presentencing phase, Skilling made a brief statement to the court.

“One issue I would like to be clear about,” Skilling said, speaking to Lake. “I think in the presentence report and certainly some of the press accounts there’s been a question of admission or expression of remorse, or lack there of. That’s just the furthest thing from the truth. These past five years, more than five years ago…I will live those days and everything that happened subsequent to that for the rest of my life.”

In a hesitating voice, Skilling said, “It’s been very hard on me, but probably, not probably, it’s been incredibly hard on my family, employees of Enron, on my friends and on the community…I can’t imagine more remorse. I have friends who have died…good men.”

Skilling likely was referring to two people. Lay, Skilling’s codefendant, died of heart failure in July (see Daily GPI, July 6). Last week, Lake vacated Lay’s conviction; he had been scheduled to be sentenced with Skilling (see Daily GPI, Oct. 18). J. Clifford Baxter, a vice chairman of Enron and considered one of Skilling’s best friends, committed suicide about two months after Enron declared bankruptcy (see Daily GPI, Jan. 28, 2002).

“All that being said your honor, I am innocent of these charges,” said Skilling. “I am innocent of every one of these charges.” He said he and his defense team “will continue to pursue my constitutional rights…”

Before Lake imposed sentence, prosecutor Sean Berkowitz called Enron’s fraud “as large and as serious as any other fraud in the nation’s history.” He told the court, “This was not a one-time event where someone made an judgment in error.” Skilling had engaged in philanthropic activities, he said, but “it is not unusual for someone in his position to give back to the community, in fact it is required.”

Berkowitz read from some of the Enron victims’ letters. From one, he read, “Mr. Skilling’s philanthropy was paid out of my future.”

The prosecutor also talked about Skilling’s statement during the presentencing.

“What I didn’t hear was any sense of personal responsibility or personal accountability for what happened,” Berkowitz said. “I have no doubt that he’s sorry about the consequences, your honor. That’s a different thing than to look at your own responsibility.”

Skilling lawyer Daniel Petrocelli requested Lake impose a seven- to 10-year sentence on his client. Petrocelli asked Lake to not look at the sentencing “from the details, but focus on the big picture.” Petrocelli agreed that the victims of Enron’s collapse had lost not only in finances, but also they had lost their hopes and dreams. “Yes, it’s true the company went bankrupt, and the victims will continue to be harmed. But did Mr. Skilling intend on that harm? Did he intend for this to happen?” Skilling “didn’t set out to harm anybody…He didn’t loot the company…he didn’t engage in self-dealing.”

During the presentencing phase, several ex-employees spoke both in favor of harsh punishment for Skilling. His former administrative assistant requested leniency.

First to address the court was Anne Beliveux, who had been an administrative assistant in Enron’s tax department.

“Never in my wildest dreams would I think I would be facing what I’m facing when I turn 65, and that is there is no retirement,” Beliveux said. “I lost over half a million dollars because it was all in Enron stock.” Looking at Skilling, she said, “The worst mistake Ken Lay ever did was to hire you, bring you in and let you run the company, a company we all loved…How would you like to be facing living off of $1,600 per month? That only is because of greed, nothing but greed, and you should be ashamed of yourself.”

Skilling looked passively at Beliveux as she spoke.

“I’m asking you to give Mr. Skilling what he deserves, the rest of his life in prison,” she said to Lake.

Charles Prestwood, who retired from Enron when he was 62 after working as one of the company’s natural gas pipeline employees, said all he has to show for the 33 and a half years he spent at Enron is two clocks.

“I’ve had a 180-degree turnaround in my life,” Prestwood said. After losing $1.3 million in retirement benefits after Enron declared bankruptcy, Prestwood said, “In my life I see a 33-and-a half-year void, a void, financially, morally, and every other way…I had $1.3 million and all I’ve got to show for it is two clocks.”

An 11-year Enron employee, Diana Peters, said her husband was diagnosed with cancer shortly before Enron collapsed, which left her without insurance. She said she had taken a variety of jobs, had sold her furniture, her home, and other assets to pay for her husband’s cancer treatment.

“My legacy to my children is my reputation, which is much more than I can say for Jeff Skilling,” Peters said. “Jeff Skilling didn’t shoot any of us, but what he did do was cause the collapse of a company that had an innumerable effect on the employees.”

Skilling’s administrative assistant for more than 20 years also spoke on Monday in defense of her ex-boss.

Sherry Stera told the court, “I cannot consider myself a victim of anyone or anything but my own short-sighted investment decisions.” She said she had a diversified portfolio in 2000, but as the stock market fell, she invested even more in Enron stock. Shortly before the company collapsed, Stera sold some of her Enron stock for about $10/share.

Of Skilling she said, “At no time during the 20 years I have worked with him have I seen anything to conclude he was leading a conspiracy” to defraud either Enron or the employees. After answering his phones and emails for several years, Stera said she never saw anything indicating Skilling was breaking the law.

“Enron was not an evil empire,” said Stera. “It was an entrepreneurial company.” She told Lake that in her opinion, “Mr. Skilling put too much faith in a few managers.” She added, “It is my opinion that Jeff Skilling has been persecuted for five years. Mr. Skilling was and still is recognized as a visionary. To lock Jeff Skilling behind bars for the rest of his life would be a greater injustice to this country. He is a natural resource that this country can ill afford to throw away or lock away.”

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