Enron Prosecutors yesterday went for their highest ranking target yet, as Jeffrey Skilling, the former chief executive of the failed energy group, was charged with 36 counts of fraud and other charges that - in theory at least - could send him to prison for life.
Mr Skilling surrendered to the FBI in Houston shortly after dawn and was taken in handcuffs to the federal courthouse to hear the formal indictment. "I plead not guilty to all counts," he told Judge Frances Stacy, who set bail at $5m (£2.6m).
The charges against Mr Skilling - who quit Enron in August 2001 for "personal reasons" three months before what was then the biggest corporate bankruptcy in US history - accuse him of defrauding investors, engaging in insider trading in Enron stock which netted him $62.6m, and making false statements to government regulators.
The Securities and Exchange Commission, the market watchdog, also filed its own charges yesterday against Mr Skilling. If convicted on all counts, he faces a maximum of 325 years in jail, and fines totalling $80m.
In essence the indictments, containing a total of 42 counts, allege a gigantic conspiracy, involving Mr Skilling and other top Enron executives, to manipulate and falsify the company's earnings reports, using an intricate network of shell companies. "These were gimmicks that amounted to outright fraud," the Justice Department said last night.
Also named are Richard Causey, Enron's former chief accounting officer; Andrew Fastow, the former chief financial officer; and the former treasurer, Ben Glisan. All three have reached plea bargains and have agreed to co-operate with prosecutors.
But just as he did to Congress in 2002, and to federal investigators since, Mr Skilling insists he is innocent, and that he knew nothing of the financial machinations of his subordinates which caused Enron's $67bn bankruptcy in December 2001, costing thousands of employees their jobs, pensions and life savings.
"Jeff Skilling did nothing wrong" and government prosecutors were looking for a scapegoat, his lawyer, Daniel Petrocelli, said.Mr Skilling is the 28th person to be charged in the Enron scandal, which subsequently led to the demise of the company's accountants, Arthur Andersen, found guilty of obstructing justice by deliberately destroying Enron documents as the crisis deepened.
The big question now is whether a 29th person, the company's former chairman Kenneth Lay, will be charged. Yesterday's indictments make no mention of Mr Lay, either by name or by title. Mr Lay, a major donor to President George Bush's political campaigns, maintains he served primarily as an ambassador for Enron and that he had virtually no involvement in the day-to-day running of the group.Reuse content