Somehow, even the 24-year prison term that former Enron CEO Jeff Skilling received Monday doesn’t seem enough to exact justice from the enormous corporate deceit that was Enron.
There’s no doubt it was a long sentence for the 52-year-old Skilling. In addition, he likely will end up forfeiting $45 million in ill-gotten gains.
But the combination of Skilling’s courthouse proclamations of innocence – he actually likened himself to a victim of the Spanish Inquisition – and the death of former company chairman Ken Lay leaves little satisfaction for Enron victims and those disgusted by the monumental fraud.
Former employee Dawn Powers Martin testified at Skilling’s sentencing, calling him a liar and a thief. “While you dined on chateau briand and champagne, we were clipping coupons,” she said.
Skilling and Lay, the company’s two most senior officers, used omissions, half-truths and outright lies to keep the myth of Enron alive and the stock price flying ever upward. And they got rich off the charade.
Their gains were in dramatic contrast to the losses suffered by Enron investors and employees when the $68 billion Houston-based energy trading company went bankrupt in 2001. The collapse decimated 5,000 jobs and $1 billion in retirement funds.
Six weeks after a jury convicted Lay of conspiracy and fraud, the 64-year-old died this summer of an apparent heart attack while in Aspen. In dying, Lay got what he so fervently sought while alive – avoiding conviction. Earlier this month, a federal judge threw out Lay’s convictions, saying precedent left him with no choice. Case law says that if a person dies before appeals are exhausted, the convictions can be vacated.
The other disquieting development was that prosecutors could no longer pursue forfeiture through a criminal proceeding. They were expecting to reclaim $43.5 million from Lay so they could offer victims at least a modicum of recompense.
Instead, prosecutors are left with the more difficult road of seizing Lay’s assets through a civil lawsuit, which the government filed late Monday in Houston. The government is seeking property worth about $12.7 million. The U.S. Department of Justice hasn’t said whether it will make claims on other parts of Lay’s estate, but the government has an obligation to do just that.
In the end, Enron victims – some of whom lost hundreds of thousands of dollars, their health and their homes – cannot be adequately repaid. That’s the real shame of this corporate scandal. No matter how persistent the prosecution, the punishment will never equal the severity of the crimes.
