The 42-count indictment unsealed Thursday accused Skilling and Richard Causey, Enron’s former chief accounting officer, of orchestrating efforts to mislead government regulators and investors about the company’s earnings.
“From at least 1999 through late 2001, defendants Jeffrey K. Skilling and Richard A. Causey and their co-conspirators engaged in a wide-ranging scheme to deceive the investing public, the [Securities and Exchange Commission], credit-rating agencies and others about the true performance of Enron’s business,” the indictment read.
Causey was indicted a month ago and is free on $500,000 bond.
“I plead not guilty to all counts,” Skilling said at a hearing before U.S. Magistrate Frances Stacy, who set his bond at $5 million and revoked his passport. One of Skilling’s attorneys told the judge he was prepared to post the bond in cash.
Skilling occasionally shook his head “no” as the judge read through the charges in the indictment, according to media reports from the scene.
Prosecutors said he could face up to 325 years in prison and over $80 million in fines if convicted of all 36 counts that name him. Another court appearance for Skilling was scheduled for March 11.
“The indictment of Enron’s CEO shows that we will follow the evidence wherever it leads — even to the top of the corporate ladder,” Assistant Attorney General Christopher Wray said.
Defense attorney Dan Petrocelli said prosecutors “were making a grave mistake” and that Skilling had cooperated fully with government panels and others investigating Enron’s demise.
“Jeff Skilling has nothing to hide,” Petrocelli said. “He did not steal. He did not lie. He did not take anyone’s money, and in the 60 pages of charges filed by the United States government, they don’t even accuse him of these things, and it’s not from lack of trying.”
Skilling became the chief executive officer and president of Enron in February 2001 after heading the company’s North American operations. He graduated in the top 5 percent of his class at Harvard Business School in the late 1970s.
Six months after being appointed CEO, in August 2001, Skilling suddenly resigned for what he called personal reasons, just five months before the company filed for bankruptcy.
His abrupt departure fueled rumors throughout the financial world, and a few weeks later Enron began to unravel as its loose accounting led to a restatement of earnings and a collapse that cost its shareholders some $1.2 billion in equity.
Skilling’s indictment also mentions Andrew Fastow, Enron’s chief financial officer who pleaded guilty and is cooperating with federal prosecutors. Fastow reported directly to Skilling while at the company.
The charges also mention 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 former Enron Chairman Kenneth Lay, either by name or by title.
Skilling has consistently insisted he did nothing wrong. In testimony before the House Energy and Commerce Committee two years ago, he blamed Enron’s demise on a liquidity crisis caused by a decline in confidence.
“I absolutely, unequivocally thought the company was in good shape,” he said.