Texas: Appeals court upholds ex-Enron CEO's convictions

By Terry Wallace

Associated Press

DALLAS (AP) -- Former Enron Corp. CEO Jeff Skilling should not receive a new trial on his convictions of 19 counts arising from the once-giant Houston-based energy company's downfall, a federal appeals court panel ruled Wednesday.

In a 13-page ruling, a three-judge panel of the 5th U.S. Circuit Court of Appeals upheld all 19 convictions of conspiracy, fraud and other crimes. It also reaffirmed its 2009 decision that vacated Skilling's sentences of more than 24 years in federal prison and ordered a resentencing.

In the 2009 ruling, the appeals court ruled that the sentencing judge misapplied federal sentencing guidelines.

In challenging the convictions, Skilling's attorney, Daniel Petrocelli of Los Angeles, argued that a June Supreme Court ruling that an anti-fraud law was used improperly to help convict Skilling meant he should receive a new trial. In oral arguments before the appeals court panel on Nov. 1, Petrocelli argued that the federal jury that convicted Skilling in 2006 in Houston of 19 counts received bad instructions that could have tainted their decision-making.

The arguments focused around a short addendum to the federal mail and wire fraud statute that makes it illegal to scheme to deprive investors of "the intangible right to honest services." The Supreme Court ruled that prosecutors can use this only in cases where evidence shows the defendant accepted bribes or kickbacks.

Petrocelli argued that under the new interpretation of the law Skilling did not conspire to commit honest-services fraud because his misconduct entailed no exchange of money.

The federal government argued that the instructions given to the jury were "harmless" because the evidence against Skilling was overwhelming. The government said the 19 convictions for conspiracy, securities fraud, insider trading and lying to auditors should stand.

In a statement issued Wednesday, Petrocelli said he would keep fighting the convictions.

"We disagree with the court's decision and believe it does not conform with the law," he said.

Skilling, 57, is the highest-ranking executive of Enron Corp. to be punished for the accounting tricks and shady business deals that led to the loss of thousands of jobs at what was once the nation's seventh-largest company, more than $60 billion in Enron stock value and more than $2 billion in employee pension plans after the company imploded in 2001.

Company founder Kenneth Lay also was convicted of conspiracy, fraud and other charges, but he died less than two months later of heart disease and his convictions were vacated.

Published: Fri, Apr 8, 2011