Enron's Former Chief Surrenders to Face Criminal Charges

HOUSTON -- - Former Enron Corp. chief executive Jeffrey Skilling was named in a 42-count indictment unsealed recently that accused him of participating in widespread schemes to mislead government regulators and investors about the company's earnings.

Skilling, who resigned less than four months before the company shattered in scandal in 2001, surrendered to the FBI recently and was taken in handcuffs to the federal courthouse to face criminal charges.

The indictment accuses Skilling, 50, and Richard Causey, Enron's former chief accounting officer, of taking part in the schemes to mislead regulators and investors. Causey, 44, was indicted a month ago and is free on $500,000 bond.

Skilling was named in 40 of the counts, 10 of them specifically accusing him of insider trading that generated $62.6 million from stock sold from April 2000 through September 2001, about a month after he quit Houston-based Enron. During that time, according to the indictment, he sold shares in blocks ranging from 10,000 to 500,000. In that time, Enron stock sold as high as $87 in September 2000 to $31 in September 2001.

The indictment also mentions former chief financial officer Andrew Fastow, who pleaded guilty and is cooperating with federal prosecutors, and former treasurer Ben Glisan, who pleaded guilty to conspiracy and became the first former Enron executive put behind bars.

The indictment makes no mention of Skilling's former boss, former Enron chairman Kenneth Lay, either by name or by title.

Both men, through their lawyers, have maintained their innocence of any wrongdoing related to Enron's failure.

Flanked by a pair of attorneys, Skilling turned himself in at the Houston FBI offices just before daybreak. About 15 minutes later, his hands behind him in cuffs, he was placed in a car for the trip to the federal courthouse in downtown Houston. He was expected to appear later in the day before a federal judge on charges related to Enron's collapse, according to two sources close to the investigation who spoke on condition of anonymity.

``Under the circumstances, he is doing extraordinarily well,'' said Dan Petrocelli, one of his lawyers.

Skilling is the highest-profile former Enron executive to date to face criminal charges and one of the most anticipated in the Justice Department's methodical investigation, which passed its two-year mark last month.

Almost exactly two years ago, Skilling bucked the trend of former Enron executives invoking their Fifth Amendment rights before Congress, telling two panels he knew nothing about serious problems at the energy trader before he quit after serving as CEO for only six months.

Skilling maintained during that testimony that he believed Enron was financially healthy when he stepped down, citing personal reasons he has not explained.

Fastow, one of Skilling's first hires after Skilling joined Enron in 1990, pleaded guilty a month ago to two counts of conspiracy and agreed to help prosecutors pursue other cases. Fastow admitted that he and others manipulated Enron's books so the company would appear successful while using various partnerships to enrich himself, his family and chosen colleagues.

Fastow's lawyers said when he was indicted in October 2002 that he was hired to do off-the-books financing and that Enron's top brass approved and praised his work.

Causey and Fastow reported directly to Skilling. Causey pleaded innocent and, unlike Fastow, is not accused of skimming millions of dollars for himself through shady self-dealing.

But top executives, including Skilling, pocketed millions of dollars from sales of stock that prosecutors allege was inflated.

Shareholder lawsuits in Houston allege Skilling gained more than $70 million from selling 1.3 million shares of stock -- about 43 percent of his holdings -- from June 1996 through November 2001. Skilling also received $13.2 million in bonuses from 1997 through 2001.

Skilling has said his stock sales were part of an ongoing program to sell a certain amount each month, and he didn't dump shares for fear of Enron going under.

Skilling graduated from Southern Methodist University in Dallas, earned an MBA from Harvard Business School and joined consulting firm McKinsey & Co. in Houston in 1986. His theory of applying finance principles to trading in the newly deregulated natural gas business led Lay to hire him.

Enron's trading operations grew under Skilling's leadership, prompting other energy companies to imitate the company's apparent success. In 1997, Skilling became chief operating officer and advanced to CEO in February 2001.