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Ex-Enron CEO denies fraud charges

Skilling was taken in handcuffs to the Houston federal courthouse.
Skilling was taken in handcuffs to the Houston federal courthouse.

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Jeffrey Skilling
Crime, Law and Justice

HOUSTON, Texas (CNN) -- Former Enron CEO Jeffrey Skilling pleaded not guilty Thursday to 36 charges against him, including multiple counts of insider trading, wire fraud, securities fraud, conspiracy to commit securities and wire fraud, and making false statements.

In an arraignment hearing, U.S. Magistrate Judge Frances H. Stacy set Skilling's bail at $5 million.

Skilling's passport was revoked, and his travel was confined to the continental United States.

If convicted on all charges, he could face the rest of his life in prison and a maximum of $80 million in fines.

The charges were laid out in an indictment that includes new charges against Richard Causey, who pleaded not guilty to six charges last month.

The conspiracy charges against Skilling and Causey allege that between 1999 and 2001 the two men employed various devices and schemes to manipulate Enron's financial results.

Skilling, 50, is the highest-ranking former Enron official charged in the government's investigation of the one-time energy giant.

He surrendered to the FBI at its Houston office Thursday and was taken in handcuffs to the Houston federal courthouse.

Skilling then appeared before U.S. Magistrate Judge Frances H. Stacy for the arraignment hearing.

Neither Skilling nor his attorneys made any comment. But Bruce Hiler, Skilling's Washington-based lawyer, has repeatedly denied his client did anything wrong. Hiler has said Skilling relied on his subordinates, lawyers and accountants.

The indictment comes on the heels of a plea deal with former Enron CFO Andrew Fastow, who agreed to serve 10 years in prison and cooperate with the Enron task force.

Enron's collapse in late 2001 has come under scrutiny by the Justice Department, the Securities and Exchange Commission and numerous congressional committees seeking answers as to how the Houston-based energy company that once stood at No. 7 on the Fortune 500 list could fall so quickly.

The collapse left thousands of employees jobless, and those whose 401 (k) plans were invested in Enron stock were wiped out. But many top executives unloaded their stock before the bottom fell out. Prosecutors said company leaders purposely kept employees in the dark about Enron's real financial situation.

Skilling, unlike other top Enron officials, did not invoke his Fifth Amendment rights when questioned by Congress in early 2002. He has blamed Enron's death spiral on what he has called a classic "run on the bank."

"It is my belief that Enron's failure was due to a classic run on the bank, a liquidity crisis spurred by a lack of confidence in the company," he testified before Congress.

"At the time I left the company, I fervently believed that Enron would continue to be successful in the future. I did not believe the company was in any imminent financial peril."

Skilling served as president and COO of Enron from late 1996 to early 2001. He was then appointed CEO, but resigned six months later, in August 2001, just months before Enron filed for bankruptcy.

The only person higher up the Enron chain than Skilling is its former chairman and longtime CEO, Kenneth Lay, who has not been charged and whose attorney has denied he was involved in any wrongdoing.

According to congressional investigators, Skilling sold more than 500,000 shares of Enron stock for more than $21 million in 1999 alone, and profited greatly by cashing in more stock in the months before the collapse.

Enron's questionable partnerships hid more than $1 billion in debt, ultimately plunging the company into bankruptcy.

"I spent probably most of my professional life helping to build Enron Corporation," Skilling told CNN's Larry King in 2002. "I don't think there was anyone that was as shocked by the collapse of the company as I was."

Pressed on the matter, Skilling was asked, "You didn't see anything coming?"

"Not only that, Larry, I'd go even farther than that. I think we had made some tremendous progress in the six months before I left," the former CEO said.

King asked, "Then why did you leave?"

"I was tired," he replied.

-- CNNfn Correspondents Chris Huntington and Jen Rogers and Justice Department Correspondent Kelli Arena contributed to this report

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