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January 6, 2009

Enron CEO Jeff Skilling's convictions affirmed, but resentencing ordered

The AP has this early report on today's huge white-collar sentencing news:

An appeals court has upheld former Enron Corp. CEO Jeff Skilling's convictions for his role in the energy giant's collapse but orders that he be resentenced.  A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans on Tuesday denied Skilling's request that his convictions be overturned because they were based on an incorrect legal theory.

But the judges, in their 105-page opinion, ordered that Skilling be resentenced. They said U.S. District Judge Sim Lake erred by applying guidelines that resulted in a 24-year prison term.  Skilling was convicted in May 2006 on 19 counts of fraud, conspiracy, insider trading and lying to auditors for his role in the collapse of Houston-based Enron, once the nation's seventh-largest company.

I will post the opinion once I track it down, and lots of commentary will follow whenever I get the chance to see exactly what the long opinion says.

UPDATE: The full opinion in US v. Skilling is available at this link.  The sentencing discussion does not start until page 97, and here is how the sentencing section begins:

Skilling challenges various aspects of his sentence. In particular, he disputes the district court’s application of the Sentencing Guidelines and the reasonableness of his sentence under 18 U.S.C. § 3553(a).  Because we decide that the court committed error in applying the Guidelines, we do not reach the § 3553(a) requirements, as proper calculation of the Guidelines range is antecedent to a reasonableness challenge.  See Gall v. United States, 128 S. Ct. 586, 596-97 (2007).

January 6, 2009 at 01:11 PM | Permalink

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Comments

http://www.ca5.uscourts.gov/opinions/pub/06/06-20885-CR0.wpd.pdf

Posted by: Kent Scheidegger | Jan 6, 2009 1:57:59 PM

Thanks Kent. My point really isn't about anything in particular, but I remain skeptical of these long, long opinions. I wonder what they are hiding in all those details, just like the endless mice type. Maybe it's the fact that I was taught that brevity and conciseness were signs of good writing. I don't know. But when I read the fact that it was 105 pages my interest and enthusiasm just went right out the window. I just can't really believe that any case is so difficult it takes 105 pages to resolve. Surely, that time could have been better spent resolving more cases.

Posted by: Daniel | Jan 6, 2009 2:41:10 PM

Essentially, the case is remanded for resentencing solely on the point that the district court incorrectly enhanced Skilling's sentence for substantially jeopardizing a "financial institution."

Posted by: Brian | Jan 6, 2009 2:45:46 PM

The sentencing portion of the opinion represents a very substantial potential benefit for Mr. Skilling, reducing his sentencing range from 292-365 months to 188-235 months. Should the district court choose to sentence Mr. Skilling at the bottom of the newly calculated range, this would produce a sentence reduction of 104 months or more than 8 1/2 years.

As a legal ruling, however, the 5th Circuit's opinion is rather odd. The sentencing issue is whether a tax-favored retirement vehicle operated by a corporation is the equivalent of a pension fund or "similar entity," for purposes triggering the "jeopardizing a financial institution" guideline enhancement. The court takes no position on the correct answer to this question. Instead, they say that the interpretations of the guideline offered by the defendant and the government are equally plausible, so by application of the rule of lenity, they choose to adopt the defendant's view. Again, potentially very helpful for Mr. Skilling individually, but hardly a definitive resolution of the legal question.

Posted by: Frank Bowman | Jan 6, 2009 5:04:19 PM

SaltedLightcom a writer for...
Enron was the 7th largest corporation in America with over 60 billion in assets which went into bankruptcy in a matter of weeks. 20,000 people lost their jobs and medical insurance. Their average serverance pay was $4500. Employee's lost 1.2 billion in retirement funds and retirees lost $2 billion in pension funds. After the illegal Vahalla swindle in 1985, Jeffrey Skilling was hired and invented PRC, where every year 10% of the employees had to be 'fired' by the other employees. Jeffrey Skilling produced a trader clic that was ruthless and later( no one saw this coming?!) unethical and criminal enough to bring a corporation of 60 billion to bankruptcy. MTM, rolling blackouts, creating false companies and borrowing money to prop up other failing companies, offshore accounts, phony accounting books, etc.
Read 'Enron-The Smartest Guys in the Room' and get back to me.
In a perfect world, corporate corruption should be the death penalty upon conviction, for it doesn't just steal, it destroys so many people's lives. It's not a lone wolf or misguided, its a monster. Michael

Posted by: Michael Brooks | Dec 5, 2009 6:45:48 PM

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