His hair still wet from a morning shower, his tieless collar open, ex-Enron CEO Jeffrey K. Skilling surrendered to the FBI in Houston shortly before 7 a.m. local time on Feb. 19. After processing, which essentially amounted to putting his pocket change and watch in a Ziploc bag, FBI agents escorted Skilling in handcuffs to the federal courthouse 15 minutes away in the city’s downtown business district.
Skilling was the latest corporate exec to do his rendition of the humiliating “perp walk” into the courthouse, in the shadow of the two vacant glass skyscrapers that once housed Enron’s world headquarters. Advertisement
Once inside, prosecutors unsealed a 57-page indictment against Skilling, which a special Enron grand jury handed down the night before. In U.S. Magistrate Judge Frances Stacy’s courtroom, Skilling sat at a table with his attorneys, flipping through the thick document, which accused him of 35 counts of wire and securities fraud (see BW Online, 2/19/04, “The Case Against Jeff Skilling”). While reading, he shook his head and smiled as if at the absurdity of the allegations.
Occasionally, he bit his lower lip, revealing perhaps a trace of anxiety, maybe even fear. Skilling disappeared with a Texas marshal, shortly before the judge appeared and returned wearing a slim, blue tie that matched his eyes.
Judge Stacy swept into the courtroom at 9 a.m., her hair disheveled. The hearing wasn’t scheduled until 11:30 a.m., but she said she decided to move it up because “the balls seemed to be rolling here.” She informed Skilling that he had the right to an attorney. Upon surveying the bevy of high-powered lawyers flanking him, including Daniel Petrocelli of Los Angeles and Bruce Hiler of Washington, D.C., Judge Stacy said, “It looks like you have an embarrassment of riches in that regard.” The press in the gallery laughed. Skilling did not.
Prosecutor Samuel Buell read the charges against Skilling, which essentially accuse him and former Enron Chief Accounting Officer Richard Causey of inflating Enron’s earnings to meet analysts’ expectations through bogus statements and fraudulent accounting. Skilling appeared straining to remain silent as Buell ticked off the allegations (see BW Online, 2/19/04, “The Books Being Thrown at Skilling”).
The maximum penalty, Buell said, is 325 years in jail and $80 million in fines should the allegations result in conviction. Not surprisingly for a man who testified before Congress last year that he was completely innocent, Skilling emphatically pleaded, “not guilty to all counts.”
Bail was set at $50 million, which required a $5 million bond payment. Said a wide-eyed Texas marshal in the courtroom: “He wrote a check. I touched it.” Skilling also surrendered his passport and promised not to travel outside the continental U.S. In return, he got back the Ziploc bag with his watch and pocket change and walked with his team of lawyers outside the courthouse to face a crowd of reporters, microphones, and TV cameras.