Skilling vs. Convictions, Round 2

This summer, about two months after former Enron CEO Jeff Skilling was convicted of fraud, conspiracy, insider trading and lying to auditors in connection with the Enron collapse, U.S. District Judge Sim Lake denied Skilling's request to have his conviction overturned. But never say Skilling is a quitter: Now, he's again asking Lake to overturn his conviction, this time based on a federal appeals court ruling.

The ruling in question had to do with some Merrill Lynch executives accused of helping Enron defraud investors. In early August, a panel of the 5th U.S. Circuit Court of Appeals threw out the Merrill execs' convictions on conspiracy and wire fraud charges because, the court said, they were doing what Enron asked them to and didn't profit at the company's expense, which means they didn't deprive Enron of "honest services." According to Skilling attorney Daniel Petrocelli, Skilling didn't do anything at Enron that wasn't in the company's best interest, so he, too, should have his conviction thrown out. Petrocelli said federal prosecutors in Skilling and ex-Enron Chairman Ken Lay's case used "honest services" to refer to any dishonest conduct rather than applying it specifically to self-serving actions, as it was in the Merrill case. Which means, Petrocelli said, Skilling should be off the hook — he didn't, after all, steal money from Enron like Andy Fastow did.

Attorney Barry Pollack, who argued another Enron case, said the same ruling used in the Merrill ruling could be applied to at least some of Skilling's convictions: "It's the exact same logic," he said, nothing that Skilling didn't specifically benefit from his actions at Enron. But another observer, Columbia Law School's John Coffee, said the argument doesn't hold water: "I don't think it will apply to [Skilling]," he said. "He does have a self-dealing motive" because Skilling's role in artificially inflating Enron's worth increased Skilling's compensation and the value of his stock options.

In any case, getting the convictions overturned won't be easy for Skilling: He'll have to prove that an appeals court would overturn almost all of the 19 counts on which he was convicted, which is a pretty big job. Meanwhile, the government is challenging the 5th Circuit Court's narrowing of the definition of "honest services," which could lead to a reversal of the panel's decision on the Merrill execs.