Former Enron CEO Jeff Skilling walks into a Houston courthouse in 2006. (Dave Einsel, Getty Images )
Former Enron Chief Executive Jeffrey K. Skilling, who is serving a 24-year prison sentence for his part in the collapse of the energy giant, could win an early release under a possible deal with the Justice Department.
Skilling was convicted in 2006 on 19 counts — including insider trading, conspiracy and securities fraud — and has served six years. During that time, his attorneys have tried several times to overturn his conviction.
The Justice Department posted a notice on its website Thursday to notify victims of the Enron fraud and bankruptcy that prosecutors may resentence Skilling.
"The Department of Justice is considering entering into a sentencing agreement with the defendant in this matter," the note said. "Such a sentencing agreement could restrict the parties and the Court from recommending, arguing for, or imposing certain sentences or conditions of confinement."
It is unclear how much the sentence will be shortened under the deal or when the Justice Department will make a further announcement.
Any changes must be approved by U.S. District Judge Sim Lake in Houston, who presided over the original trial. In 2009, a federal appeals court ruled the 24 years imposed by Lake was too harsh, but resentencing has been delayed as Skilling's attorneys tangled in other courts on a broader appeal.
The news is yet another chapter in the saga of Enron, which imploded in 2001 in what was then the largest corporate bankruptcy. Thousands of workers lost their jobs and much of their life's savings as their retirement accounts plunged in value.
The Houston company's market manipulation schemes were implicated in the energy crisis that swept California and other Western states in 2000 and 2001.
Skilling and other corporate executives such as WorldCom Inc.'s Bernard Ebbers became symbols of corporate greed after the tech bubble of the 1990s burst. Many were convicted and sent to prison. Former Enron Chairman Kenneth Lay died while awaiting sentencing.
News of the possible resentencing disappointed Andrew Stoltmann, a securities lawyer who represented outside Enron investors trying to regain losses after the company's collapse.
"He left such a wide swath of destruction," Stoltmann said. "It's stunning that somebody who was convicted of doing what he did and creating the losses he created will serve far less than your average bank robber."
Skilling has consistently maintained his innocence. Calls and emails to his defense attorney, Daniel Petrocelli, were not returned
In 2010, the U.S. Supreme Court ruled that a federal "honest services" law, which was used to help convict Skilling, was too broad. That decision partly overturned his conviction.
But a federal appeals court later determined that despite the Supreme Court ruling, the verdict would have been the same "beyond a reasonable doubt." The Supreme Court last year refused to hear Skilling's appeal of that court decision.
Some legal scholars said a deal was not that surprising considering how many years had passed and the potentially embarrassing allegations that could crop up on future appeals or in a new trial.
The Justice Department has had to face allegations of misconduct surrounding its specially formed Enron Task Force. Skilling's attorneys were planning to fight for a new trial based on that alleged misconduct.
"There have been just a spate of allegations of misconduct against the Justice Department," said Laurie Levenson, a professor at Loyola Law School. "They don't want a retrial. That would be a nightmare."
She noted the Justice Department may especially want to avoid headlines after its botched case against former Alaska Sen. Ted Stevens; the department's internal watchdog concluded last year that two federal prosectors acted with reckless misconduct.
"They don't want people to think that whenever they handle a big case you can't trust them because years later, they find misconduct," Levenson said.
Legal experts say it's probable that a deal has already been reached, and it is unlikely to change no matter how outraged victims are.
John Coffee, a professor at Columbia University's law school, said a shorter sentence for Skilling won't influence the actions of other corporate wrongdoers.
"Most other corporate CEOs don't say, 'Good, I can get six years instead of life,'" he said. "Anything beyond a year in prison is inconceivable to a high-status corporate executive."