Jeffrey Skilling is a former American businessman and the former CEO of energy and services company, Enron Corporation. In 2006, he was found guilty of federal felony and charged for false audit presentations, insider trading, conspiracy, etc. His acts led to the eventual collapse of Enron Corporation. Jeffrey joined Enron Corporation in 1990 when he was hired by Kenneth Lay who too, would later be convicted. Within a few years, Jeffrey replaced Lay to become the Chief Operating Officer of Enron and gained control over the company’s non-public information. His positive attitude and aggressiveness helped his firm become ‘America’s Most Innovative Company’. However, in 2001, the company experienced a sudden downfall and the situation only worsened due to the California electricity crisis. Jeffrey decided to resign and also sold his stake worth $60 million. Later in the year, the company faced bankruptcy and Skilling, along with Kenneth Lay, was accused of conspiracy. In 2006, Skilling was convicted of 35 offences and sentenced to 24 years and four months in prison. He was also ordered to cough up a fine of $45 million. In 2013, the Justice Department reduced Skilling's jail term by a decade.
Childhood & Early Life
Jeffrey Keith Skilling was born in Pittsburgh, Pennsylvania, on November 25, 1953. He was born to Betty and Thomas Ethelbert Skilling Jr. He was raised along with three siblings.
He grew up in New Jersey and Illinois. His father worked as a sales manager, while his elder brother went on to become the chief meteorologist at WGN-TV.
Jeffrey attended West Aurora High School in Illinois. He started working at a television station called WLXT while he was still studying in his high school. He was only 16 when he took up his first job.
Since he was a gifted learner, he received a full scholarship to attend Southern Methodist University in Texas. He majored in Applied Science at the university.
After graduating from the university, he was sent to Harvard Business School by a Houston bank, where he worked right after his graduation.
In 1979, he completed his MBA from Harvard. He was one of the brightest students in his class and graduated as a Baker Scholar.
Continue Reading Below
You May Like
Jeffrey started working as a consultant at McKinsey & Company under energy and chemical practices. He went on to become one of the youngest partners of McKinsey.
He then started working for Enron and quickly climbed the ladder of success at the company.
Career at Enron Corporation
While he was working at McKinsey & Company, Skilling got an opportunity to work on a project for Enron. His skills and his understanding of how energy works impressed Kenneth Lay, the then CEO and Chairman of the company.
Lay offered Skilling the position of Chairman and Chief Executing Officer of Enron Finance Corp.
In 1991, Skilling went on to become the chairman of Enron Gas Services Company. A few months later, he was also named the CEO and Chairman of Enron Capital & Trade Resources which was a subsidiary of Enron.
After working at Enron for seven years, Skilling finally became the President and CEO of the entire corporation. This made him the second most powerful man in the corporation.
Skilling soon turned Enron into the largest wholesaler of gas and electricity in the USA. His investment strategy, along with his adoption of mark-to-market accounting, contributed immensely to the growth of the company.
As a result, Skilling replaced Lay in February 2001 to become the most powerful man of Enron. He received $132 million in a single year as the CEO of his company.
On August 14, 2001, Skilling submitted his resignation. Lay was then called back to take up the post of CEO.
Continue Reading Below
Downfall of the Company
As soon as Skilling resigned from his post, Enron’s performance went down quite dramatically. In August, the company’s stocks hit an all-time low and by October they were as low as $15.
Around the same time, Lay was accused of selling nearly $60 million of his stake and in November 2001, the company started plummeting.
From being the most celebrated and successful company in the USA, Enron went on to face bankruptcy. Accusations like false display of audits, insider trading and laundering ruined the company’s reputation forever.
In December 2001, the company declared bankruptcy. It was the biggest bankruptcy in the history of the United States. 20,000 people lost their jobs and investors suffered huge losses worth millions of dollars.
In 2006, Jeffrey and Kenneth were both convicted of conspiracy, fraud and insider trading. Many others who were indirectly involved in the crime escaped imprisonment by coughing up hefty prices.
Jeffrey Skilling was accused of 35 offences which involved various fraudulent activities. He surrendered to the FBI on February 19, 2006.
It was argued that Jeffrey had an idea about the possible bankruptcy of the company. It was also said that he had sold $60 million of his stake as he knew that the company wouldn’t last long.
His trial began on January 30, 2006 in Houston despite Skilling’s request to conduct the trial somewhere else. He claimed that the trial, if held at Houston, will not be fair. But his plea was rejected by the court.
On May 25, 2006, he was proven guilty of conspiracy, insider trading, false statements to the auditor and securities fraud. On October 23, 2006, he was sent to the prison for 24 years and four months.
Continue Reading Below
He was also ordered to cough up a fine of $45 million US dollars. His conviction was considered as one of the harshest in the history of white-collar crimes.
His request to remain free during his appeals to higher courts was rejected as Judge Patrick Higginbotham ordered his immediate imprisonment. He started serving in the prison from December 13, 2006.
Kenneth Lay, on the other hand, died of heart attack, before starting his sentence in 2006. On October 30, 2008, Jeffrey was transferred to a low-security jail near Littleton.
In 2009, it was argued before the Supreme Court that Jeffrey’s intention was not to achieve profit for himself from the company. It was also argued that the evidence used against him was not true.
In 2011, the court came up with an unchanged verdict even after considering the above mentioned arguments. Skilling then decided to appeal to the Supreme Court and challenged the latest judgement, but was denied certiorari.
However, in 2013, it was announced by federal prosecutors that Skilling’s sentence has been reduced by 10 years. The announcement was approved by U.S District Court Judge, Sim Lake, in 2013.
It was said that he would be released in 2017. However, he wasn’t released in 2017 and his release date was pushed to February 21, 2019.
Jeffrey’s first marriage ended in divorce in 1997. Jeffrey and his first wife had a daughter and two sons.
His youngest son died of drug overdose on February 3, 2011 at age 20. Skilling was in the prison at the time of his son’s death.
Skilling got married to Rebecca Carter in March, 2002.