Legal News

Judges in Skilling Argument Hold Cards Close to the Vest

By Ashby Jones

Law Blog colleague Amir Efrati flew all the way to New Orleans yesterday to cover the appellate argument over Jeff Skilling’s conviction. From the early report, sounds like poor Amir got a raw deal — the argument was a bit of a snoozer. (Hope you at least got some good etouffee, buddy!)

The lowdown: According to the report, the judges on the panel stayed largely silent during oral arguments, giving little indication of their thinking on the case. Too bad. We’d hoped to hear tales of riveting debate over the brief recently submitted by the defense arguing the government had withheld crucial evidence from the defense. No dice. The judges scarcely discussed that evidence.

The focus of Wednesday’s hearing was a federal fraud statute which aims to punish an employee who deprives his employer of “honest services.” Shortly after Skilling was convicted in the spring of 2006, the Fifth Circuit overturned several convictions based on the honest-services theory. In the so-called “Nigerian Barge” case, brought against several former executives at Enron and Merrill Lynch for making a deal that allegedly fraudulently boosted Enron’s earnings, the court said the honest-services theory couldn’t be used to prosecute an employee whose fraudulent acts were intended to benefit corporate interests, such as meeting earnings targets, rather than their own. (Some of the defendants are facing a retrial.)

At the hearing Wednesday, the judges let Skilling’s lawyer, Dan Petrocelli, and the government’s lawyer, Douglas Wilson, argue why that ruling should or shouldn’t apply to Mr. Skilling’s case.

So does Skilling have a chance? Yes, at least according to this Houston Chronicle article. Referring to the Nigerian Barge decision, which called into question lower court judge Sim Lake’s handling of the “honest services” issue, White-Collar Crime Prof Blog author Peter Henning told the Chron: “It’s like dropping a rock in a pond and what the ripple effect will be. He’s got the error. Now it’s just how far he runs with it.”

Full post as published by Law Blog - WSJ.com on December 31, 1969 (boomark / email).