Supreme Court to Hear Appeal of Enron's Skilling
By JOHN R. EMSHWILLER
The one untarnished courtroom victory from the Justice Department's investigation of the Enron Corp. was questioned Tuesday when the Supreme Court agreed to hear the appeal of former company Chief Executive Jeffrey Skilling, who is trying to overturn his conviction and 24-year prison sentence.
The justices agreed to look at two issues in the appeal of Mr. Skilling's 2006 conviction that could have broader repercussions, say legal observers.
One deals with the government's contention that Mr. Skilling violated his legal obligation to provide "honest services" to Enron shareholders because he lied about the energy-trading company's financial condition before it collapsed into bankruptcy in December 2001. Mr. Skilling's attorneys maintained that prosecutors misapplied the honest-services statute, arguing their client hadn't lied and didn't cheat Enron or its shareholders.
The second issue involves Mr. Skilling's claim that he wasn't able to get a fair trial in Houston, site of Enron's headquarters, because of anger in the community over the company's collapse.
Daniel Petrocelli, Mr. Skilling's lead attorney, said the Supreme Court's decision means the defense "will finally get an opportunity for a full, frank and fair hearing" of issues that led to "Jeff's wrongful conviction." The Justice Department declined to comment.
The Supreme Court earlier accepted for review another appeal related to corporate honest-services fraud. That case involves the conviction of former Hollinger International Inc. Chairman Conrad Black. Oral arguments in Mr. Black's Supreme Court case are scheduled for December. No date has been set for oral arguments in the case of Mr. Skilling, who is in federal prison in Colorado.
The question of what constitutes honest-services fraud is under debate. "The lack of clear guidance" on the statute "has been a problem in this area of criminal law for years," said Mark Biros, a former federal prosecutor and now a partner in the Washington office of Proskauer Rose LLP. "It would be helpful to everyone if the Supreme Court steps in."
Mr. Biros said the court might be considering treating the Skilling and Black appeals as companion cases. The justices could use the two cases to provide a broader interpretation of the honest-services issue, he said.
The court's agreement to hear Mr. Skilling's arguments on the location of his trial surprised Columbia Law School professor John Coffee. "The area of venue is something the Supreme Court hasn't touched for a long, long time," Mr. Coffee said. If the court agrees with Mr. Skilling, whose attorneys argued for a venue change before the trial, it could have a wide impact.
In the 2006 trial, Mr. Skilling and former Enron Chairman Kenneth Lay were convicted of fraud and conspiracy. Mr. Skilling was also convicted of insider trading. Shortly after the trial, Mr. Lay died of heart-related problems and his conviction was vacated.
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I'm glad to see these cases coming back to the forefront of the news as they will have significant impact on the way business is conducted from now on. I think the borderline corrupt business practices of the past have skated by on barely adequate vague laws and now we will have some definite guidelines and precedent to work from when executives bend the truth, hide the truth or flat out lie to protect their own investments over those of their shareholders.
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