Academic

The Houston Chronicle is reporting that Jeff Skilling's appeal of his 24-year sentence to the Fifth Circuit was not as successful as it could have been.  Although eight months ago, when the appeal was heard, the tides seemed like they might have been turning for Skilling and other corporate defendants as the demonization of Enron and other companies was fading into history.  However, we are now in a resurgence of scorn and distrust for corporate executives, and it is against this backdrop that much of Skilling's very long sentence will stand.  One of the sentence enhancers that was used to calculate Skilling's sentence under the federal sentencing guidelines required that the defendant's conduct substantially jeopardize the soundness of a "financial institution."  The Fifth Circuit panel did not agree that either of the Enron employee benefit plans were "financial institutions."  (The WSJ blog has a link to the opinion.)

Watchers of the corporate criminal trials of recent years were most interested to see if all or part of Skilling's conviction would be thrown out after the Fifth Circuit determined in other Enron-related cases that the "theft of honest services" theory that the government was pursuing was flawed as applied to these types of executive wrongdong cases.  (See posts at Conglomerate here.)  However, this panel decided not to re-analyze the convictions under that reasoning.  In addition, the convictions seemed to hold despite allegations of prosecutorial misconduct (see Ideoblog for this storyline.)  According to the Houston Chronicle, without the "financial institution" enhancement (which was merely one of many guideline enhancements applied to Skilling's sentence), the sentence may be reduced to something between 15 and 19 years.  Although getting a decade of one's life back must seem like a gift, serving 15 years is still no picnic by any stretch of the imagination.

Will Skilling ask for a rehearing en banc?  Go to the U.S. Supreme Court?  These are once again hard times to be a corporate defendant.  Several Enron Broadband defendants, whose first trial ended in acquittals for some counts and hung verdicts for others, are set to be retried for the second time by prosecutors but have a petition for certiorari waiting at the Supreme Court right now.  Nevertheless, one of those defendants, Joseph Hirko, pled guilty recently (and fairly quietly) in return for serving no more than 16 months.  (Cert was granted for his co-defendants Scott Yeager and Rex Shelby after Hirko pled guilty.)  The prospect of going to trial in these "tough economic times" is fairly dicey for a corporate executive, to say the least.