Jeff Skilling Files Opening Brief in his Appeal

Enron may have collapsed in 2001 but the litigation is never ending.

On September 7, Former Enron CEO Jeff Skilling filed the opening brief in the appeal of his criminal conviction with the 5th Circuit Court of Appeals. The 239 page brief creates “four distinct categories of legal error that produced Skilling’s erroneous convictions:” (1) erroneous theory of fraud; (2) erroneous jury instructions; (3) community prejudice and truncated voir dire; and (4) prosecutorial misconduct.

In the first category, Skilling argues that the prosecution based its case upon a theory of “honest services” fraud; where a corporate executive can be liable for defrauding his employer even where the executive’s actions are intended to benefit the employer. According to Skilling, the 5th Circuit rejected this theory following his conviction in the case US v. Brown, 459 F.3d 509 (5^th Cir. 2006).

Skilling asserts that many of the instructions to the jury were made in error. In finding guilty knowledge on the part of Skilling, the jury was instructed that it could infer a culpable mental state if it also found he had intentionally made himself ignorant of actions taking place at Enron that he strongly suspected to be criminal. According to Skilling, this “deliberate ignorance” instruction is strongly disfavored in the 5th Circuit.

The jury instructions regarding the materiality of statements made by Skilling are also being attacked. He argues that the trial court applied an inappropriate standard under the securities laws by instructing jurors that they need only find his statements were “important.” Skilling also points out that many similar statements were dismissed by the very same district court judge in a civil case connected to the collapse of Enron’s water business. He goes on to state, “That a jury was allowed to convict Skilling criminally for statements for which he could not be held liable civilly not only reveals the instructional error requiring reversal, but underscores the profound unfairness of this entire case.”

He also argues that the trial court erred by allowing testimony from Andrew Fastow, former Enron CFO, that described “secret oral side deals” between himself and Skilling, while not instructing the jury on how they were to find whether or not these agreements in fact existed.

The last assignment of error relating to jury instructions is that Skilling was not allowed an instruction that explained his good faith reliance upon the advice of Enron’s lawyers and accountants, which Skilling claims, was central to his defense. Instead, he argues, the trial judge instructed the jury that Skilling was only entitled to rely on the advice of his personal lawyers and accountants.

The third major category described by Skilling asserts that the jury pool was tainted by the wide sweeping impact of Enron’s collapse on the Houston community, and that a change of venue should have been granted. In addition, Skilling argues that any chance of finding an impartial jury was lost during an unreasonably short voir dire which only lasted “five hours and screened only 46 jurors -only eight jurors more than the minimum necessary to empanel a jury after the parties had exercised their peremptory strikes.” (emphasis original)

In the final category of “legal errors” Skilling accuses the prosecution of a veritable laundry list of misconduct, including; withholding exculpatory evidence, coercing and threatening witnesses, securing unlawful plea agreements, and destroying crucial documents. Lastly, Skilling attacks the twenty four year sentence handed down by the trial court, pointing out that it is “six years longer than the average federal sentence for murder.”

Check back for continuing coverage of this case. Skilling’s brief can be found on the DU Corporate Governance website.