High Court To Weigh Ex-Enron CEO's Appeal
STEVE INSKEEP, Host:
Enron CEO Jeffery Skilling was convicted of multiple crimes and sentenced to 24 years in federal prison. The U.S. Supreme Court has agreed to hear Skilling's appeal and NPR's Wade Goodwyn brings us up to date.
WADE GOODWYN: Sitting in a federal prison is a nearly forgotten man. He helped give birth to an entirely new industry, trading natural gas futures. Jeff Skilling was the real brains behind the magnificent success story called Enron. His fall from grace was just as spectacular, becoming one of the most despised men in Houston history, which is saying something. And now, after being consigned to the dustbin, Skilling could be posed to make his curtain call as the victim of a federal prosecution gone astray.
M: And I think there will be a lot of people who will be angry if the Supreme Court reverses this decision.
GOODWYN: Loren Steffy is the business columnist for the Houston Chronicle who's been covering the Enron prosecutions. He doesn't believe the U.S. Supreme Court should let Skilling walk, but he thinks there is a chance, Skilling might.
M: Usually when the Supreme Court takes a case like this, it usually winds up in some sort of a reversal.
GOODWYN: There are two questions that the court has agreed to consider. The first, should the judge have granted Skilling's request for a change of venue? Daniel Petrocelli is Skilling's lawyer.
M: The problem with the jury pool in Houston was that you could barely find a single individual anywhere who had not, himself or herself, suffered economic calamity.
GOODWYN: Before the trial Petrocelli pleaded with U.S. district judge Sim Lake to move the proceedings out of Houston - to Phoenix or Atlanta. He argued that the entire city felt duped after Enron imploded.
M: You cannot have the victims of a crime sitting in judgment of the defendant.
GOODWYN: But change of venue is just the first shot in Petrocelli's arsenal. The second round concerns a federal statute that was at the heart of the government's case against Jeff Skilling - namely, that the Enron CEO deprived the company's employees and shareholders of what federal law calls his honest services.
INSKEEP: His schemes deprived another of the intangible right of honest services. And that's a quote from the statute. The question is, what the heck does that mean?
GOODWYN: Susan Klein teaches law at the University of Texas Law School. Klein says the Honest Services Statute was originally designed to convict public officials who were lining their pockets. But as Wall Street corruption became higher profile during the last decade, prosecutors began to look for additional ways to charge those executives. Deprivation of honest services became that tool, giving the government the opportunity to introduce a broader range of evidence. It was a concept that was simple for juries to understand, and it had the benefit of being just vague enough to allow prosecutors to apply it to a number of allegedly dishonest and illegal acts.
INSKEEP: And I think that's what the prosecutors would like. They'd like it just to be whatever they charge it to be and they can convince 12 jurors that it should be. But a lot of circuit courts are very troubled by that.
GOODWYN: But federal prosecutors reply that the proof is in the conviction pudding. When prosecutors present evidence of repeated deceptions by a company's top officers, juries seem happy to convict of honest services fraud. Jacob Frenkel is a former federal prosecutor and an SEC enforcement lawyer.
M: This is the law that has been used to prosecute them and prosecute them successfully. Given the broad range of fraud, with respect to corporate boardrooms, government prosecutors sought opportunity to enhance their arsenal with the expansion of the Honest Services Fraud Doctrine.
GOODWYN: The Federal Appeals Courts have upheld some honest services convictions and thrown out others. With the Appeals Courts pointing in both directions like the Scarecrow in "The Wizard of Oz," the question is ripe for the nation's highest court. But University of Texas law professor Susan Klein predicts that the Supreme Court is not going to gut the Honest Services Statute entirely.
INSKEEP: I don't think its going to happen. It wouldn't be just these cases that would be reversed. They're basically saying honest services isn't really a crime, but what do we do with all those people who have been convicted and who are now in prison, serving sentences for honest services mail fraud? They were convicted of something that isn't a crime.
GOODWYN: Wade Goodwyn, NPR News, Dallas.
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Correction Nov. 11, 2009
We incorrectly reported that former Enron CEO Jeffrey Skilling is currently at the Federal Correctional Institute in Waseca, Minn. Skilling is an inmate at the Federal Correctional Institution in Littleton, Colo.