Enron Verdicts Starting to Unravel

Tom Kirkendall has an update on the various Enron cases, starting with the Nigerian barge case where  the conviction of four Merrill Lynch executives was vacated by the Fifth Circuit.  In fact, the appeals court ruling was so damning that the DOJ has decided not to retry the executives, and the case may well be a leading indicator that other Enron-related prosecutions are in jeopardy.

Although expected, the DOJ's decision in the Nigerian Barge case
reverberates through several other pending Enron-related cases. The DOJ
can retry three of the four former Merrill Lynch executives, but that
would be petty by even the DOJ's standards given the eviscerated nature
of the original charges and the fact that each of the defendants has
already spent a year of their lives in prison based on a prosecution
that was based more on resentment than on true criminal conduct. The
Fifth Circuit's now final decision in the barge case casts doubt (see also here) on a substantial number of the charges upon which former Enron CEO Jeff Skilling was convicted, and dispositively blows away over 80% of the case against former Enron Broadband executive Kevin Howard. In addition, the re-trials of Howard's former co-defendants from the disaster that was the first Enron Broadband case are now in various states of disarray, as is the pressured plea deal of former mid-level Enron executive, Chris Calger. And don't forget the mess that is the DOJ's case against the NatWest Three (see also here).


  1. Ming Jack Po:

    I had just recently watched: "Enron: The Smartest Guys in the Room"


    and find the whole Enron debacle despicable. I don't know much about the Nigerian case, but I strongly believe that Jeff Skilling and his Enron cronies should go to jail for a long time. Something doesn't have to be illegal for it to be morally reprehensible.

  2. momo:

    ummm... Ming Jack Po...

    That type of thinking brought us hate crime legislation, and has become far too pervasive.

    Despicable, fine. Morally reprehensible, you are probably correct. I won't quibble with your adjectives.

    But exactly WHEN should reprehensible, but not illegal, behavior be punished by jail time? When teenagers are spewing curse words at the park among preschoolers? Certainly not. When some doofus lets his telephone ring LOUDLY during the live performance of your favorite concerto? Again, not. When your realtor persuades you to buy well outside of your price range? Sadly, not.

    We are trying to have a civilization here. When we begin to prescribe JAILING people for unmannerly, ungentlemanly, BUT NOT ILLEGAL conduct (as your post specified), ... what do we become?

  3. TCO:

    McKinsey should be convicted. Not of anything (that they think of as, but what I do) criminal. But of poor thinking. They are supposed to be the best of the best of strategists. Of business thinking. And they did not ask themselves, what it meant that Enron had negative earnings per tax returns and postive per accounting.

    And you still have Davis saying that Enron failed because of a bank run, not poor business practice. Would he say the same of a Ponzi scheme? What a shallow thinker. Wonder if he even read the book on Enron (smartest guys). Wonder if he ever reads a book.

    Oh...and Lowell Bryant...grrr...a sin on intellect and inquiry.

  4. TCO:

    just to clarify, I find poor thinking and pretension and style over substance, to be criminal.

  5. Ming Jack Po:

    Hey momo,

    I think you might have mis-understood me. I completely agree that we cannot convict people based on some vague definition of morally reprehensible. I was simply expressing my feelings of anger towards Jeff Skilling and noting where I would like him to rot.

    I strongly believe that executives should take social contract seriously. There are millions of ways to cheat and steal while still sticking to the letters of the law. The only real solution is to hire executives that are value driven.