Skilling Gives First Extended Post-Conviction Interview
The Wall Street Journal’s John Emshwiller scored the first extended
post-conviction interview with Skilling. His story appeared in Saturday’s WSJ.
Here are the highlights:
- Skilling says that his refusing to take the Fifth after Enron’s collapse — and giving interviews to the SEC, Congress and Larry King — hurt his case. “I was the best source of information that the government had. Absolutely,” he said. “Stupid me,” he said with a laugh, though he added that he still believes speaking out was the “ethical” thing to do. He added: “My children were never going to see me take the Fifth in front of Congress. Period.”
- Skilling was suicidal in the two years following Enron’s collapse, and it was his 2004 indictment that pulled him out of his depression. “The indictment, in a lot of ways, that was the turning point,” Skilling recalled. “That’s when I started climbing back.”
- To prepare for his trial, Skilling wandered the Utah wilderness for two weeks, hiking up to 30 miles a day, as part of a survival-training program. He slept on the ground, had no food for the first three days and then dined largely on whatever he could find, including insects. (He recommends caterpillars and grub worms, which he says “are basically pure fat.”)
- On the prospect of spending a big chunk of the rest of his life in prison: “I’ve come to the conclusion that life is better than the alternative, which was not a conclusion that was real clear to me for a period of time.” He also said: “A lot better people than I am have been in prison for a long time. Give me something to work on, give me something to accomplish.” Plus, he added with one more laugh, “At some point, people will ask what really happened [at Enron]. It would be good if they had someone there who could tell them.”
- Skilling still refers to federal prosecutors as “the Gestapo.”
- Skilling still insists he didn’t commit any crimes.
When Skilling testified before Congress, defense lawyers everywhere rolled their eyes in disbelief. Nothing good would come from his testimony and it could easily come back to haunt him. And in fact, prosecutors skillfully used Skilling’s testimony before Congress & the SEC against him. Lay invoked the fifth before Congress, but chose to testify at trial. Lay’s trial testimony was especially damaging. Both were convicted. I’m sure they both deeply regret the decision to testify. Whether it would have changed the outcome, in light of the damaging evidence the prosecutors mounted, is a different story. The prosecution had damning evidence against Lay and Skilling that, if left unrebutted, would have sustained a conviction. Lay’s status as a net seller of Enron stock, while imploring employees to buy it and saying it was a bargain, could have been introduced into evidence without Lay’s testimony with the custodians of records for his brokerage accounts. But you have to imagine that both are kicking themselves for their decisions to testify.
Also of interest is whether the dozens of potentially exculpatory witnesses put on ice by the government would’ve made a difference. Without those people to rebut the government’s claims about what happened in meetings, Lay and Skilling had little choice but to testify. (Separately, was Lay really a “net seller”? I thought his sales were involuntary margin calls as the stock dropped.)
The prosecutor did their job to bring Lay and Skilling to justice. And both Lay and Skilling shouldn’t never testified from the get go. It just made their defense crumbled.. And Skilling needs to stop crying nanny nanny boo boo on on his claim for innocence! You do the crime then you do the time! Move on…
To Ted: When a customer receives a margin call, he is given a short time frame to bring the account in accordance with Regulation T. Reg. T requies that intial security purchases with borrowed funds have at least 50% collateral in the account to secure them. If the value of the collateral dips below 25% of the borrowed funds, the customer receives a margin call and has a short time to bring the value of the collater back to at least 25% of the borrowings. The brokerage firm does not care how the customer funds the shortfall. Thus, it was Lay’s choice, after receiving a margin call, to transfer cash or sell any security he owned to meet the margin call. **The prosecution introduced Lay’s holdings at the time of the margin call to prove that he had other securities he could have sold, but that he elected to sell Enron.** The involuntary sale *only* occurs if a customer receives a margin call but fails to take action in response. Regarding the “exculpatory” witnesses, they were other Enron executives with potential criminal liability who would not testify without immunity. Unsurprisingly, the prosecution was unwilling to give them a free pass. The prosecution does not have an obligation to immunize witnesses to help the defense. The defense asked the judge to compel the prosecution to provide immunity and he declined. In light of the substantial evidence the prosecution amassed, what possibly could these witnesses have said that would changed the outcome? Lay implored employees to buy stock while he was unloading it. No witness could undo that evidence. That was one basis of his conviction.
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