Former Enron CEO in deal to cut prison term
May 8, 2013 9:12 PM   Subscribe

Jeffrey Skilling, the former Enron Corp chief executive, could be freed from prison nearly a decade sooner than originally expected, under an agreement with federal prosecutors to end the last major legal battle over one of the biggest corporate frauds in U.S. history.
posted by Leisure_Muffin (70 comments total) 8 users marked this as a favorite
 
"He set up the PRC(Performance review system) in which employees were graded from 1 to 5. Ten percent of people had to be a five, irrespective of absolute performance. Those 10% were to be fired."

Fuck that guy. Fuck every one of them.
posted by notsnot at 9:20 PM on May 8, 2013 [39 favorites]


"In exchange, Skilling, 59, who has long maintained his innocence, agreed to stop appealing his conviction."

How many appeals can he have? I'm honestly asking, I don't know how meaningful this is.
posted by boo_radley at 9:23 PM on May 8, 2013


Fuck that guy. Fuck every one of them.
posted by slater at 9:24 PM on May 8, 2013 [9 favorites]


So he's going to buy his way out of prison, by using the very money he stole - the very reason he was convicted and found guilty.

There's something very, very wrong with this.
posted by alex_skazat at 9:26 PM on May 8, 2013 [17 favorites]



"He set up the PRC(Performance review system) in which employees were graded from 1 to 5. Ten percent of people had to be a five, irrespective of absolute performance. Those 10% were to be fired."

Fuck that guy. Fuck every one of them.


To be fair, that wasn't Skilling's idea. Stack Ranking (aka, rank and yank) is supposedly a Jack Welch invention.
posted by deadmessenger at 9:27 PM on May 8, 2013 [6 favorites]


How many appeals can he have? I'm honestly asking, I don't know how meaningful this is.

As many as his well-paid lawyer can figure out he can have. It's not like this dude is black, and on death row for killing a white police officer.
posted by alex_skazat at 9:27 PM on May 8, 2013 [13 favorites]


notsnot, I think you started the quote a bit late. From just before that:

He believed that money and fear was the only thing that motivated people.

How are people like this allowed to be in charge of others? If the system helps sociopaths to become well-paid managers, maybe the system is broken?
posted by Ghidorah at 9:27 PM on May 8, 2013 [8 favorites]


He can go free years early, while people are sent to solitary confinement for years just for reading a book about the Black Panthers.

Does this seem unreasonable to anyone else?
posted by fifteen schnitzengruben is my limit at 9:28 PM on May 8, 2013 [8 favorites]


I have zero idea why people are mad. An appeals court ruled the sentence imposed was too harsh and the government decided to make a deal rather refight that battle. Every minute those funds are not disbursed, people harmed are older or pass away. This is a smart move. The government could have lost the case and he would get an amount less than he served. He'd be freed instantly on sentencing.

But the newspaper decided it would sell more papers if they wrote it up as an outage.
posted by Ironmouth at 9:30 PM on May 8, 2013 [10 favorites]


How many appeals can he have?

How many torches and pitchforks can we have?
posted by charlie don't surf at 9:33 PM on May 8, 2013 [5 favorites]


I still wonder who whacked Ken Lay.
posted by Auden at 9:34 PM on May 8, 2013 [2 favorites]


How can the common person keep this shit bag behind bars?
posted by breadbox at 9:36 PM on May 8, 2013 [1 favorite]


Ironmouth: " Every minute those funds are not disbursed, people harmed are older or pass away. "

I don't disagree.
posted by boo_radley at 9:37 PM on May 8, 2013


There are two justice systems: one for the rich and one for the poor. I wish that were hyperbole.
posted by zardoz at 9:43 PM on May 8, 2013 [20 favorites]


"I have zero idea why people are mad. An appeals court ruled the sentence imposed was too harsh and the government decided to make a deal rather refight that battle."

People are mostly mad because the sentence was not too harsh to begin with.
posted by Leisure_Muffin at 9:46 PM on May 8, 2013 [23 favorites]


Ironmouth: I have zero idea why people are mad.

Really?
posted by hattifattener at 9:48 PM on May 8, 2013 [4 favorites]


Pathetic.
posted by homunculus at 9:51 PM on May 8, 2013


I came here to say "Fuck that guy" and I saw that it was already said, but I'm going to say it again.

Fuck. That. Guy.
posted by twjordan at 9:52 PM on May 8, 2013 [1 favorite]


He should be shived. Enron's manipulations of fuel prices during a very cold winter damn near killed me and my son. I handle cold well, so does he but it was simply too much. An $800 gas bill in one month! Over twice my then mortgage
We were thrown into 'heat or eat' mode that whole winter. It was terrible.
I was making decent money at the time but there was no gain because of this price-fixing.
He and his minions were proud of this.
People suffered.
posted by Katjusa Roquette at 9:56 PM on May 8, 2013 [67 favorites]


But the newspaper decided it would sell more papers if they wrote it up as an outage.

They wrote it as outrage because people should be outraged. Selling more papers is a byproduct.

This isn't about stopping the horrible things he did in the past from continuing to have their negative affects on people today and into the future. That should be a byproduct of actual justice.

Actual justice should be focused on what he did in the past and how badly he already fucked over so many people, many of whom are already dead.

He's not, he gets an early release from prison.

Which I'm fine with, as long as it means we get to burn him at the stake.
posted by allkindsoftime at 10:00 PM on May 8, 2013 [4 favorites]


ugh.
posted by Annika Cicada at 10:12 PM on May 8, 2013




As soon as he's out, Grandma Millie is going to kick his ass.
posted by homunculus at 10:17 PM on May 8, 2013 [5 favorites]


[A couple of comments deleted; understood that people are angry, but descriptions of violent fantasies about killing and torturing someone isn't the way to go here. Thanks.]
posted by taz (staff) at 10:27 PM on May 8, 2013 [6 favorites]


"Stack Ranking" and "The Bear" on 105.9FM! In the mornin'!
Sorry. Stack Ranking is such a bullshit DJ/morning zoo name, I just had to call that out.
posted by KevinSkomsvold at 10:37 PM on May 8, 2013 [2 favorites]


Somewhere, Gray Davis is smiling
posted by Fupped Duck at 11:21 PM on May 8, 2013 [2 favorites]


"He set up the PRC(Performance review system) in which employees were graded from 1 to 5. Ten percent of people had to be a five, irrespective of absolute performance. Those 10% were to be fired."

Fuck that guy. Fuck every one of them.


Ever worked at a big company? Think of the people who are the bottom 10% performers. They suck, and deserve to be fired. You hate working with them, and so do I.
posted by Afroblanco at 11:28 PM on May 8, 2013 [2 favorites]


I think I prefer his brother Tom.
posted by professor plum with a rope at 11:37 PM on May 8, 2013 [4 favorites]


The agreement calls for Skilling to see his federal prison sentence reduced to as little as 14 years, down from the 24 years imposed in 2006. It could result in Skilling's freedom in late 2018, with good behavior.
...
In imposing the 24-year sentence, U.S. District Judge Sim Lake in Houston said Skilling had through his crimes "imposed on hundreds, if not thousands of people a lifetime of poverty."

Life imprisonment sounds fair under these circumstances.

posted by sebastienbailard at 11:37 PM on May 8, 2013 [3 favorites]


http://en.wikipedia.org/wiki/California_electricity_crisis

Read it and weep.


If a foreign country had done this, would we have invaded?
posted by kurumi at 11:39 PM on May 8, 2013 [2 favorites]


Hunh.

Why does he still have any leverage (that $40 million due to pensioners)?

The government has already seized it. Disburse it already.
posted by notyou at 12:02 AM on May 9, 2013 [2 favorites]


Ever worked at a big company? Think of the people who are the bottom 10% performers. They suck, and deserve to be fired. You hate working with them, and so do I.

Except the criteria was "Ten percent of people had to be a five, irrespective of absolute performance".

So, just picking ten percent to fire, whether or not they sucked. That's weapons grade douchebaggery. Performance assessment on the bell curve. Fuck that.
posted by His thoughts were red thoughts at 12:03 AM on May 9, 2013 [11 favorites]


Why does he still have any leverage (that $40 million due to pensioners)?

The government has already seized it. Disburse it already.


It has to be held in trust until he stops appealing, because of the risk that he might win the appeal. Not sure whether he gets unlimited appeals.
posted by His thoughts were red thoughts at 12:04 AM on May 9, 2013 [2 favorites]


If a foreign country had done this, would we have invaded?

As far as Shrub and Kenny-Boy were concerned, California was the foreign land they were screwing over. Good times.
posted by homunculus at 12:07 AM on May 9, 2013 [4 favorites]


Ever worked at a big company? Think of the people who are the bottom 10% performers. They suck, and deserve to be fired. You hate working with them, and so do I.

Afroblanco, the rank-and-yank system doesn't fire the bottom 10% performers of a company. It fires the bottom 10% of individual teams or business units. In other words, if you happen to be a highly productive worker on a fantastically successful team, you're still gonna get fired because your boss has to fire somebody.

You can imagine what that does to morale.

In practice -- as was seen at Microsoft -- what happens is that workers become preoccupied with promoting themselves to the management committees that decide their fate (and deprecating the performance of others). Teamwork plummets, office politics and cronyism soars, not to mention cheating and unethical behaviour. No-one cares about actually putting out a great product any more; everyone is focused on making sure they're not fired (and that somebody else is instead).
posted by dontjumplarry at 12:07 AM on May 9, 2013 [32 favorites]


Think of the people who are the bottom 10% performers. They suck, and deserve to be fired. You hate working with them, and so do I.

Not me. I'm *in* that bottom 10%.

If I were the boss, I'd fire those assholes in the top 10% who go around making the rest of us look bad.
posted by PeterMcDermott at 12:11 AM on May 9, 2013 [10 favorites]


Ever worked at a big company? Think of the people who are the bottom 10% performers. They suck, and deserve to be fired. You hate working with them, and so do I.

You're placing a whole lot of faith in a performance review system's ability to correctly identify that bottom ten percent. Bad employees can evade capture through political savvy and backstabbing.

In my experience, every performance review system ends up measuring something other than performance. In Enron's case, it measured sociopathic tendencies:
So Enron was applying selection at the individual level according to metrics like individual trading performance to a group system whose performance was, like the henhouses, an emergent property of group dynamics as well as a result of individual fitness. The result was more or less the same. Instead of increasing overall productivity, they got mean chickens and actual productivity declined. They were selecting for traits like aggressiveness, sociopathic tendencies, and dishonesty.
posted by savetheclocktower at 12:32 AM on May 9, 2013 [15 favorites]


How can the common person keep this shit bag behind bars?

Not a damn thing. But the common person can opt to use the technology of the US military and Facebook to load facial recognition technology on their smart phones.

And anytime said people run into his face they shun him. For extra fun, refuse to sell whatever goods/services they offer to him.

Perhaps there is a startup/VC money in a foursquare-for-asshole spotting?
posted by rough ashlar at 1:03 AM on May 9, 2013 [1 favorite]


(and why arn't ya all up in arms over Lou Pai? He departed with $250+ million)
posted by rough ashlar at 1:08 AM on May 9, 2013 [2 favorites]


If a foreign country had done this, would we have invaded?

Why ask this question?

Just because people are suffering hasn't been a reason for invasion. It may be pitched as a reason but a closer truth is what Smedly Butler had to say in War is a Racket.
posted by rough ashlar at 1:18 AM on May 9, 2013


Which I'm fine with, as long as it means we get to burn him at the stake.

As long as these "we"s are willing to do the time for that crime. The downside for the Ex-CEO is some of the people who got screwed over are on short-time and won't be that worried about doing prison time.
posted by rough ashlar at 1:26 AM on May 9, 2013


I have zero idea why people are mad.

I know, right? It's like people expect justice to be meted out to Wall Street crooks running a con game. What suckers!
posted by Blazecock Pileon at 2:34 AM on May 9, 2013 [12 favorites]


It's okay to let Skilling go, but he has to live in that trailer park just outside of town. On food stamps.
posted by tommyD at 3:35 AM on May 9, 2013 [3 favorites]


Ten percent of people had to be a five, irrespective of absolute performance. Those 10% were to be fired.

I have no love for Skilling, none at all. But I was an Enron employee and I can tell you that's not exactly how the PRC worked. It was much more complicated than that, and it took up to 18 months for someone to lose their job within the rank-and-yank system. A lot of us actually liked the system as it was (not as stated in wikipedia), because it meant that you never had those people who didn't contribute and just slacked off constantly. It really worked there.

Skilling's not much of a person, though. We pretty much all knew that even before he became the CEO.
posted by Houstonian at 4:31 AM on May 9, 2013 [3 favorites]


The government has already seized it. Disburse it already.
This.

Can someone explain to me why this hasn't been done? Because my feeble understanding is that if it had been done then it doesn't really matter how long we keep this corporate dirtbag in the slammer for... which is the reason why criminal courts are separated from civil.
posted by Blue_Villain at 4:50 AM on May 9, 2013 [1 favorite]


I wouldn't feel too upset; Skilling is going to be mired in civil litigation the moment he walks out of prison.
posted by Renoroc at 5:25 AM on May 9, 2013


It has to be held in trust until he stops appealing, because of the risk that he might win the appeal. Not sure whether he gets unlimited appeals

He doesn't get unlimited appeals. What happened here, by my reading, is this:

1) He was convicted
2) He appealed to the Fifth Circuit
3) He appealed that ruling to the Supreme Court
4) The Supreme Court found in his favor on one argument regarding one count and remanded to the Fifth Circuit to figure out if the error with regard to that one count was "harmless"
5) The Fifth Circuit found that it was.

The thing is, at step 2, the Fifth Circuit also found that he was sentenced inappropriately because the the court sentencing him incorrectly applied a sentencing enhancement for "endangering a financial institution." Under the Federal Sentencing Guidelines, there are different levels for offenses (right now it's 43), with the level for each offense calculated by looking up the crime in a table and then adding any adjustments based on factors which aggravate the crime. One of those adjustments is that the offense "substantially jeopardized the safety and soundness of a financial institution"

With the Fifth Circuit having resolved the issues related to that one charge that the Supreme Court remanded, the only thing left to do is redo his sentence, without the improper consideration of "endangering a financial institution." The sentencing agreement resolves this issue by agreement rather than having another hearing, with the goal (presumably) of getting it resolved as quickly as possible.

It was long, it was drawn out, but it was really only one appeal.
posted by Bulgaroktonos at 5:31 AM on May 9, 2013 [7 favorites]


tommyD: It's okay to let Skilling go, but he has to live in that trailer park just outside of town. On food stamps.

As an added bonus, he can only spend those food stamps on birthday cake while conservatives watch.
posted by dr_dank at 6:17 AM on May 9, 2013 [2 favorites]


deadmessenger: "To be fair, that wasn't Skilling's idea. Stack Ranking (aka, rank and yank) is supposedly a Jack Welch invention."

To be perfectly fair, the Roman army can claim prior art on this tactic.
posted by schmod at 6:27 AM on May 9, 2013 [2 favorites]


Maybe this . . .
posted by Obscure Reference at 6:28 AM on May 9, 2013


(and why arn't ya all up in arms over Lou Pai? He departed with $250+ million)
rough ashlar

Who said we weren't? This post is about Skilling, so we're talking about Skilling.
posted by Sangermaine at 8:17 AM on May 9, 2013


It really worked there.
Houstonian

I think you define "worked" differently than I do.
posted by rock swoon has no past at 8:55 AM on May 9, 2013


He should be shived. Enron's manipulations of fuel prices during a very cold winter damn near killed me and my son.

I'm sorry for asking what's almost certainly a really ignorant question (I live in California where it doesn't really get all that cold in the winter), but I'm curious about this. When it gets cold, can't folks wear thermals or use heavy blankets? I've camped in tents during snow storms, sleeping in a sleeping bag rated for like 30 below and felt quite toasty. Is the heat just to keep pipes from freezing or something?
posted by Thoughtcrime at 9:35 AM on May 9, 2013


The US already has the world's highest incarceration rate. This deal will help alleviate that.
posted by Tanizaki at 9:49 AM on May 9, 2013 [1 favorite]


Sending rich people to jail is so last decade.
posted by Legomancer at 9:50 AM on May 9, 2013 [2 favorites]


Charles Pierce: The End Of Enron
posted by homunculus at 10:18 AM on May 9, 2013


The government has already seized it. Disburse it already.
This.

Can someone explain to me why this hasn't been done? Because my feeble understanding is that if it had been done then it doesn't really matter how long we keep this corporate dirtbag in the slammer for... which is the reason why criminal courts are separated from civil.


The money was likely in escrow. The fine depends on the sentence. Since the sentence was not clear, the fine was not clear, so the money was not disbursed. Otherwise, the government might have to get it back from people if the fine was found to be too high.
posted by Ironmouth at 10:36 AM on May 9, 2013


How can the common person keep this shit bag behind bars?

Skilling should have gone to prison, and I'm glad he went prison, but I also glad his sentence was reduced. A 14 year sentence (which is what it's been reduced to) is no joke. One thing that's fucked up about the American justice system is how ridiculously punitive it is, because it seems like everyone's out for blood and not justice.
posted by cosmic.osmo at 11:05 AM on May 9, 2013 [2 favorites]


It was long, it was drawn out, but it was really only one appeal.

I think there are two ways that people count appeals, by court cases and by "levels."
posted by Jahaza at 11:17 AM on May 9, 2013


it seems like everyone's out for blood and not justice

Skilling destroyed a lot of people's retirement savings. Regular folks who play the game fair, work for a few decades and sock away for a comfortable retirement can't just snap their fingers and get those decades back, but Skilling is special and gets to walk away free and clear. It's not hard to see why some people find all of this problematic, on a lot of levels. If anything, this emboldens the same criminals who were responsible for the 2008 crash and also got to walk away from the damage they caused, thanks to their friends in the current administration.
posted by Blazecock Pileon at 12:34 PM on May 9, 2013 [4 favorites]


Well, the sooner he gets out, the sooner some other fortune 500 company can hire him as their CEO. He'll be back in the game in no time!
posted by loquat at 12:47 PM on May 9, 2013


Fastow has already finished his prison sentence (which he finished up in the comfort of his own million-dollar home) and now works for a law firm. "Document Review Clerk." He does not have a law degree.
posted by Houstonian at 1:02 PM on May 9, 2013 [1 favorite]


Skilling is special and gets to walk away free and clear....If anything, this emboldens the same criminals who were responsible for the 2008 crash and also got to walk away from the damage they caused, thanks to their friends in the current administration.

But the thing is, Skilling isn't walking away free and clear. The real thing that will embolden future criminals like him is that the 2008 lot has gotten off scot free, rather than getting 14 year prison sentences and being bankrupted by fines and attorney's fees. Who's going to be deterred by a 24 year prison sentence but not a 14 year one?
posted by cosmic.osmo at 1:13 PM on May 9, 2013


Skilling hasn't been completely bankrupted, or not in any way that means he's broke. Did you know that his wife lived next door to Beyonce's mom until last year? So, here is the house next door to Skilling's Houston home. They just sold their $800,000 condo in Dallas. I believe he has at least one other house as well. She and Jeff also incorporated two companies(Veld Interests and Veld Investments), I presume for their investments.

They won't be worrying about the bills.
posted by Houstonian at 2:37 PM on May 9, 2013


Did you know that his wife lived next door to Beyonce's mom until last year? ....

No, I did not know about that, and I don't approve at all. He should have been totally bankrupted and forced to pay restitution out of whatever income he receives until the people he hurt are fully compensated (which will be long past the end of his life). I'm just against the "lock him up and throw away the key" sentiment.
posted by cosmic.osmo at 3:52 PM on May 9, 2013


I'm mad because there should be a thousand more Skillings in prison, but our own AG claims that some institutions are just too big to prosecute.
posted by RobotVoodooPower at 4:16 PM on May 9, 2013 [1 favorite]


I've camped in tents during snow storms, sleeping in a sleeping bag rated for like 30 below and felt quite toasty.

Well, yeah, but you did this for like a weekend or something, right? Constant long-term exposure to cold environments is something else again. Health Effects and Cold Environments info from the Canadian Centre for Occupational Health and Safety. And many of the effects are worse or can happen more quickly if you're talking about young children or people over 60.

When it gets cold, can't folks wear thermals or use heavy blankets?

Sure, and a lot of people who have specifically pay for heat will do this, to some degree, to reduce their heating costs. But I mean they're keeping their house between 55 - 65 degrees Fahrenheit, rather than the "standard" room temp of 72. If it's 35 outside, an unheated house could easily be 40 at best, and again, extended exposure to these kind of temperatures can be debilitating - even with thermals and heavy blankets, your body's using a lot of energy just to keep its' core temperature up.

Is the heat just to keep pipes from freezing or something?

Since water expands as it turns to ice, "pipes freezing" often really means "pipes bursting", so it's often more than a matter of waiting til things warm up for water to flow - finding and repairing burst pipes or joints can be a difficult and expensive job. Losing access to clean water can certainly be a health hazard.

And besides that; I don't know where the MeFite you quoted is from, but one of the major results of Enron fucking about with fuel prices for fun & profit was a whole series of electrical blackouts and brownouts, as electrical generating plants couldn't afford the fuel to keep running, and losing electricity opens up a whole other list of possible health and safety issues.
posted by soundguy99 at 5:07 PM on May 9, 2013 [3 favorites]


Enron's manipulations of fuel prices during a very cold winter damn near killed me and my son.

One thing that never got any press was that when it gets hot in the summer and blackouts happen, people die. Old people who get overwhelmed by the heat, sick people who aren't strong enough to withstand it. How many people died that summer in California when Enron decided to stage deliberate blackouts to make the supply of power look lower than it really was? Both California and Texas have the death penalty- why is Jeff Skilling appealing a prison term, and not a death sentence?
posted by Pope Guilty at 7:42 PM on May 9, 2013 [6 favorites]


But I was an Enron employee and I can tell you that's not exactly how the PRC worked. It was much more complicated than that, and it took up to 18 months for someone to lose their job within the rank-and-yank system. A lot of us actually liked the system as it was (not as stated in wikipedia), because it meant that you never had those people who didn't contribute and just slacked off constantly. It really worked there.

Personally, I think it'd be a badge of honour to be the biggest slacker at Enron. Presumably that would make you the person who stole the least?
posted by PeterMcDermott at 11:42 PM on May 9, 2013 [1 favorite]


Smartest guys in the room on youtube.

If you skip ahead past the 1:00:00 mark you get to see tape of Skilling making a joke about the California scam:

What's the difference between California and the Titanic?

When the Titanic went down the lights were still on.

This is speaking public to an audience and they all laugh like he's Louis CK.
posted by bukvich at 5:39 PM on May 11, 2013 [1 favorite]


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