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Former Enron CEO to face indictment, sources say

By Kristen Hays
The Associated Press

	Jeffrey Skilling
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The two sources, who spoke on condition of anonymity, confirmed that Skilling, 50, was in the government's crosshairs on the heels of securing a guilty plea to two counts of conspiracy from former Enron finance chief Andrew Fastow last month. But they said the process was delicate and public revelation of the new case could be delayed.

The Houston Chronicle first reported in its online edition early yesterday that prosecutors were finalizing possible charges against Skilling and that a special Enron grand jury had been working more frequently as the Justice Department's investigation, launched more than two years ago, has intensified in recent weeks.

So far in the Justice Department's investigation into Enron's collapse, launched more than two years ago, 27 individuals have been charged. Of those, nine, including Fastow, have pleaded guilty. Neither Skilling nor Enron founder and former Chairman Kenneth Lay — the disgraced company's top two executives — have been charged.

Skilling's Washington, D.C., lawyer, Bruce Hiler, a former prosecutor for the Securities and Exchange Commission, reiterated yesterday that his client had done nothing to merit criminal charges.

"If a COO can't rely on the dozens of experts who review and recommend transactions, then no COO should go to work tomorrow, because they may find themselves indicted," Hiler said.

Hiler was referring to Skilling's former title of chief operating officer at Enron. Skilling was COO from 1997 until he succeeded Lay as chief executive officer in February 2001. He abruptly resigned from the company in mid-August that year after only six months in the position, citing personal reasons. Lay resumed as CEO, and Enron went bankrupt less than four months later amid devastating revelations of hidden debt, inflated profits and dirty accounting.

Michael Ramsey, one of Lay's lawyers, declined comment yesterday on possible charges against Skilling.

	MARK WILSON / GETTY IMAGES Richard Causey, a former Enron executive, was indicted Jan. 21.

It wasn't clear what specific charges Skilling might face, although sources said they would likely be similar to conspiracy and fraud charges filed last month against Richard Causey, Enron's former chief accounting officer who, like Fastow, reported to Lay and Skilling.

Causey was indicted Jan. 21 for allegedly being a "principle architect" of plots to hide debt, pump up profits and polish the company's pre-scandal facade of success. His indictment noted he reported to the CEO and COO.

Causey pleaded not guilty to one count of conspiracy and five counts of securities fraud.

He was charged a week after Fastow and his wife, Lea, pleaded guilty in a package deal.

Fastow, facing a 98-count indictment alleging he masterminded a wide array of schemes to make Enron appear profitable while skimming millions of dollars for himself, agreed to plead guilty to two counts of conspiracy and serve 10 years in prison.

When Fastow was initially indicted in October 2002, one of his lawyers, John Keker, said he was hired to do off-the-books transactions and that Enron's chairman, CEO and directors "directed and praised that work."

Skilling, unlike Lay, Fastow and others, did not invoke his Fifth Amendment rights when questioned by Congress in early 2002. He also appeared on some national talk shows when the scandal broke and denied that a conspiracy to defraud investors had existed. He attributed Enron's demise to a "run on the bank" after Fastow's self-dealing was made public.

"On the day I left, on Aug. 14 (2001), I believed the company was in strong financial condition," Skilling told a House committee in February 2002. "I wasn't there when it came unstuck."

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