Jeffrey Skilling on Monday stood before a judge who would decide how he may spend the rest of his life.
This is what the former Enron CEO said: “Your honor, I am innocent of these charges. I am innocent of every one of these charges. We will continue to pursue my constitutional rights. … I feel very strongly about this, and I want my friends, my family to know that.”
I don’t claim to be the smartest guy in the room, but if this were me, I would have said: “Your honor, I deeply regret all the lives ruined in Enron’s collapse. The worst punishment I face is living with myself. There are no words to convey my shame. I wish every penny could be restored to my investors. I am so, so, so sorry.” Etc. Etc. Sob. Sob.
I would stop this self-effacing soliloquy just short of contradicting any arguments needed for my appeal. There would be only a small chance that this feigned remorse would reduce my sentence.
Skilling, 52, can now rot in prison knowing that he did not even try.
U.S. District Court Judge Sim Lake gave him 24 years and four months. This is the number that Skilling must now try to change, not with accounting tricks, but with good behavior. Wouldn’t it have been better to start at 15 or even 20?
Using a risk-management assessment – something Enron claimed to be good at – was Skilling’s unremorseful speech worth it? Couldn’t his $50 million legal team get him to shut up?
“Arrogance and self-righteousness are the kinds of things you’ve got to keep hidden when a judge holds your fate in his hands,” said Lowell Peterson, a New York attorney who recouped severances for displaced Enron employees.
“He could have said ‘I’m sorry’ for the effect without taking responsibility for the cause,” Peterson said. “But obviously, he’s feeling like a victim.”
It’s amazing a man so lacking in self-awareness was in charge of one of America’s largest companies.
“If he had been able to admit that Enron was going down the tubes, maybe none of this would have happened,” said Anthony Accetta, a former U.S. prosecutor turned private fraud investigator. “But he did not have the moral courage to admit that he might have been wrong in his business calls. And that’s how white-collar guys end up committing crimes. They don’t have the moral courage to admit a mistake.”
Skilling’s co-defendant Ken Lay seems to have suffered the same character flaw. Shortly after his conviction, Lay flew to Aspen where was going to spend the summer, then died of a heart attack. Lay’s conviction was overturned on grounds that he no longer had the opportunity to appeal. Which goes to show that a snowball’s chance in hell is still a chance.
Skilling and Lay argued that Enron was just an economic accident. They did not persuade a jury, but some people believe them. “The system creates winners and losers,” said Chicago attorney Paul Fisher. “When people lost (at Enron), they needed a scapegoat.”
Fisher is a director of the Heartland Institute, a group devoted to free-market solutions to social and economic problems. He says regulators from California, angry about Enron’s profits, and the media, among others, unjustly turned Enron into a crime scene. He co-authored a letter to Judge Lake to help guide his decision.
“If the misrepresentation of Enron’s financial condition in 2001 as alleged in the indictment had not occurred, presumably the bad news would have been known earlier,” the letter said. “That in turn would have caused the Enron share price to collapse sooner and even less time would have been available for investors and employees to liquidate their holdings. The implication … is that there was no additional harm done to the investors and employees from the alleged hiding of Enron’s profit and losses.”
Perhaps the Dow would be even higher if all CEOs lied like Skilling and Lay.
“The market does not allocate personal ethical values,” said Buie Seawell, a professor of business ethics and legal studies at the University of Denver’s Daniels College of Business. “When you are deceiving shareholders, that’s not a market issue. That’s a legal issue.”
Al Lewis’ column appears Sundays, Tuesdays and Fridays. Respond to Lewis at denverpostbloghouse.com/lewis, 303-954-1967 or alewis@denverpost.com.
