Possible deal could cut ex-Enron CEO's sentence

[April 05, 2013]  HOUSTON (AP) -- A possible agreement that could reduce the prison sentence of former Enron Corp. CEO Jeffrey Skilling for his role in the collapse of the once mighty energy giant is being discussed, according to the U.S. Justice Department.

The possibility of a sentencing agreement in the case was made public this week in a notice to victims of Enron's collapse.

"The Department of Justice is considering entering into a sentencing agreement with the defendant in this matter," the notice said. "Such a sentencing agreement could restrict the parties and the Court from recommending, arguing for, or imposing certain sentences or conditions of confinement. It could also restrict the parties from challenging certain issues on appeal, including the sentence ultimately imposed by the Court at a future sentencing hearing."

The notice did not specify how Skilling's sentence could be impacted if an agreement is reached. Skilling has been in prison since December 2006. He is currently serving his sentence in a low security facility outside of Denver.

Michael Passman, a Justice Department spokesman, declined to comment. Daniel Petrocelli, Skilling's attorney, did not immediately return a phone call or email seeking comment.

Former Enron employee George Maddox, who lost $1.3 million in retirement savings when the energy giant collapsed, said he doesn't think Skilling should have his sentenced reduced.

"It would be OK with me if they would force him to live on $2,400 a month like he has forced me to live," said Maddox, 79, who lives in the East Texas town of Van, where he is supporting his 16-year-old grandson and himself mainly on Social Security income.

Maddox, who worked for 30 years as a plant manager with the company, said justice would be denied if a deal is reached.

"I think he should serve (his sentence) like any other common criminal," he said.

Before this week, Skilling's sentence was already in question.

Skilling was convicted in 2006 on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of Houston-based Enron. He was sentenced to more than 24 years in prison. The company collapsed into bankruptcy in 2001 under the weight of years of illicit business deals and accounting tricks.

An appeals court in 2009 upheld his convictions but vacated his 24-year prison term and ordered that Skilling be resentenced, saying a sentencing guideline was improperly applied, resulting in a longer prison term. He has yet to be resentenced.

Philip Hilder, a Houston attorney who represented several former Enron executives who cooperated with prosecutors, said if an agreement is reached, he doubts it will result in Skilling's release based on time served.

"I do think he will get a significant reduction but I think he will still be incarcerated for the foreseeable near future," said Hilder, whose clients included Sherron Watkins, who famously warned Enron founder Kenneth Lay in late August 2001 that Enron could "implode in a wave of accounting scandals."

However Matthew Orwig, a former U.S. Attorney in East Texas now in private practice in Dallas, said he would be surprised if an agreement would substantially change Skilling's original sentence.

If a sentencing agreement is reached, U.S. District Judge Sim Lake, who presided at the trial, would have to give final approval.

In 2010, the Supreme Court said one of his convictions was flawed when it sharply curtailed the use of the "honest services" fraud law, and told a lower court to decide whether he deserved a new trial. The lower court said no.

Skilling, 59, was the highest-ranking executive to be punished for Enron's downfall. Lay's similar convictions were vacated after he died of heart disease less than two months after trial.

Enron's collapse put more than 5,000 people out of work, wiped out more than $2 billion in employee pensions and rendered worthless $60 billion in Enron stock. Its aftershocks were felt across the city and the energy industry.

[Associated Press; By JUAN A. LOZANO]

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