October 23, 2006
Posted by Christine Hurt

The media is describing today as "the end of an era" as Jeff Skilling receives his sentence from Judge Sim Lake at a hearing beginning at 1:00 p.m. CST in Houston.  At the beginning of the hearing, 10-12 employees of Enron will testify as victims before Judge Lake hands down the sentence.  I understand that risking one's human capital (and to some extent one's retirement capital) is more serious than risking one's financial capital due to lack of diversification opportunities, but I do see most Enron employees as risk-seeking.  During the 1990s, I knew many workers who were recruited to Enron:  attorneys, accountants, software engineers, traders, legal assistants, and secretaries.  They all went to Enron because of the lure of big money.  Enron paid more, and Enron rewarded people at all levels with stock.  The work was grueling (at all levels), but the rewards were high.  I'll be interested to see what is said in these 5-minute testimonials.

In the Houston Chronicle this morning, my colleague Margareth Etienne, who submitted a brief in support of Skilling, is quoted as arguing that Skilling should not be punished for exercising his right to a jury trial while others at Enron pled guilty and received a "plea discount."  Professor Jack Coffee is also quoted as agreeing with the idea that defendants are punished for proceeding to trial and thereby taking up a judge's time.  Other Enron defendants who seem as culpable as Skilling or more received reduced sentences for providing testimony, specifically Andy Fastow, who received six years in prison for "cooperating."  The Chronicle does report that both sides reached an agreement on the amount of damages caused by Skilling's conduct, a significant factor in sentencing under the Guidelines.

To whet readers' appetites while waiting until the 1:00 hearing, here are gameday comments by Larry Ribstein and Tom Kirkendall, as well as a round-up of Enron commentary on WhiteCollar Crime Blog (by Ellen Podgor and Peter Henning).

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