Top Ex-Enron Exec To Surrender

Jeffrey Skilling, the brash and sometimes volatile former Enron Corp. chief executive who resigned less than four months before the company imploded in scandal, is slated to face criminal charges almost exactly two years after telling Congress he knew nothing of serious problems at the company, sources told The Associated Press.

Two sources close to the investigation, who spoke on condition of anonymity, said Wednesday that Skilling was expected to surrender to the FBI early Thursday and then appear before a federal judge on charges related to Enron's collapse.

Barring any last minute delays, Skilling, 50, would be the highest-profile former Enron executive to date to face criminal charges. One of his lawyers, Bruce Hiler, spent less than an hour in the federal courthouse in Houston Wednesday afternoon familiarizing himself with its layout.

Skilling's only real rival on the notoriety scale — Enron founder and former chairman Kenneth Lay — has not been charged, and the sources said it was unclear when or if he would join his former protege as a defendant.

Both men, through their lawyers, have staunchly maintained their innocence of any wrongdoing since Enron collapsed and went bankrupt in December 2001.

Skilling in 2002 spoke for himself, insisting during testimony before two congressional panels in February 2002 that he believed Enron was financially healthy when he abruptly quit after only six months as CEO, citing personal reasons he has not explained. Other former executives, including Lay, invoked their Fifth Amendment rights and declined to testify before Congress.

Skilling has been publicly silent since 2002, letting his lawyers speak for him as they see fit.

If he faces charges Thursday as anticipated, Skilling will be the 28th individual and one of the most anticipated in the Justice Department's methodical investigation, which passed its two-year mark last month.

It also would come just a month after former Enron finance chief Andrew Fastow pleaded guilty to two counts of conspiracy and agreed to help prosecutors pursue other cases.

"Skilling had to know that this was in the works, especially after Andrew Fastow, Enron's former CFO, cut a deal last month with the feds. Skilling has already put together a sharp defense team. He's using Ron Woods, a Houston lawyer who represented Oklahoma City bombing conspirator Terry Nichols, and Daniel Petrocelli, who did a wonderful job in the O.J. Simpson civil case," says CBSNews.com Legal Analyst Andrew Cohen.

"Skilling's surrender means that the investigation is almost to the top of the Enron pyramid, about as close to the top as you can get, with only Kenneth Lay himself now left to go after. And I think we'll know soon whether Lay will be indicted because either Skilling will be able and willing to turn on his former boss or he won't," says Cohen.

Fastow was one of Skilling's first hires shortly after Skilling joined Enron in 1990. In his guilty plea, Fastow admitted that he and others manipulated Enron's books so the company would appear successful while using various partnerships to enrich himself, his family and chosen colleagues.

Fastow's lawyers said when he was indicted on nearly 100 counts in October 2002 that he was hired to do off-the-books financing and that Enron's top officers and directors approved and praised his work.

It was unclear what specific charges Skilling will face. The sources said they likely would be similar to conspiracy and fraud charges filed more than three weeks ago against Richard Causey, Enron's former top accountant who, like Fastow, reported directly to Skilling.

Causey pleaded innocent and, unlike Fastow, is not accused of skimming millions of dollars for himself through shady self-dealing.

But all the top executives, including Skilling, pocketed millions of dollars from sales of stock prosecutors allege was inflated. Enron shares hit a high of $90 in August 2000.

Causey's indictment said he gained more than $14 million from selling Enron stock and stock options — netting a profit in excess of $5 million — and earned more than $3 million in salary and bonuses from 1998 through late 2001.

The main action in a conglomerate of federal shareholder lawsuits in Houston alleges Skilling gained more than $70 million from selling 1.3 million shares of stock — about 43 percent of his holdings — from June 1996 through November 2001. Skilling also received $13.2 million in bonuses from 1997 through 2001.

When Skilling resigned, he did not take a $20 million severance package. He has said his stock sales were part of an ongoing program to sell a certain amount each month, and he didn't dump shares for fear of Enron going under.

Skilling was born in Pittsburgh, but grew up and attended public schools in New Jersey and Aurora, Ill. He graduated from Southern Methodist University, earned an MBA from Harvard Business School and joined consulting firm McKinsey & Co. in Houston in 1986, where his theory of applying finance principles to trading in the newly deregulated natural gas business prompted Lay to hire him.

Enron's trading operations grew under Skilling's leadership, prompting other energy companies to imitate the company's purported success. In 1997, Skilling became chief operating officer and moved into an 8,000 square foot Mediterranean-style mansion in Houston's wealthiest neighborhood. He stepped into the CEO position in February 2001.

He has three children — two teenage sons and a 20-year-old daughter in her second year at SMU — from his first marriage, which ended in divorce in 1997. In March 2002, he married Rebecca Carter, a former vice president for board communications and board secretary at Enron.