Federal prosecutors are planning to seek a criminal indictment against Jeffrey Skilling, a former chief executive of Enron, people involved in the case said on Friday.
The timing of the charges is still in flux, these people said, although the current plan is that they will probably be announced Thursday or later. Throughout the Enron case, prosecutors have repeatedly filed charges under seal for a few days, announcing them only after the defendants have surrendered to the authorities.
The precise charges that might be brought against Skilling could not immediately be determined. But most of the issues being investigated by prosecutors pertain to events that took place from 1996 through early 2001, when he was chief operating officer and president of Enron.
Accounting Moves
In recent months, prosecutors have been seeking evidence of Skilling's involvement in a series of accounting moves at Enron that the government has contended in other criminal cases were part of an effort to falsely inflate the company's financial performance.
In earlier questioning of witnesses, prosecutors also sought to link Skilling to what they contend was a criminal conspiracy to misrepresent the technological abilities of Enron's broadband unit from 1999 through 2001. A number of executives from the Enron broadband division were indicted on such charges last year.
Bruce Hiler, a lawyer for Skilling, said that his client had done nothing improper. He said that all of Skilling's actions were taken with the full knowledge and approval of scores of lawyers, accountants and members of the company's board.
"Jeff Skilling has nothing to hide," Hiler said. "If the COO can be indicted for transactions that were reviewed and recommended by dozens of experts, than no COO should go to work tomorrow morning, because if something goes wrong with their company they are in danger of being indicted."
Evidence
The anticipated indictment of Skilling is not solely the consequence of any sudden breakthrough in the investigation, but rather is the result of a slow compilation of evidence pursued over multiple lines of inquiry. Indeed, what began two years ago as an investigation into Enron's improper use of off-the-books partnerships has evolved instead into a multitiered case involving both basic accounting and financial reporting issues as well as the more complex accusations raised by the partnership machinations.
At the same time, the case has transformed from somewhat straightforward questions of criminality to less obvious ones. The investigation that once largely focused on what amounted to thefts of corporate cash by the former chief financial officer is now one examining the more subtle and potentially more important issue of when earnings management crosses the line into earnings manipulation.
As a result, people involved in the investigation said, it is not a case that will depend on the testimony of any single witness.
Instead, it involves an array of witnesses whose cooperation was secured over the course of the inquiry.
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