Jeff Skilling, A Man Who Wanted To Change The World.

"... And that's our vision, we're trying to change the world," were the words of a nation-wide commercial about Enron's new venture into e-commerce, Enron Online, a new commodity trading platform on the internet that allowed traders to trade through a website rather than over the phone. Throughout the commercial, Jeff Skilling spoke in his usual sharp, crisp, and wise tone of voice that drew so many people at and outside the company to trust his leadership and truly believe that they would never be as smart as Jeff. Now, over a decade after the bankruptcy of the energy-giant, a company born through a merger of InterNorth and Houston Gas, and which had a tremendous rise throughout 1990s, thanks in large to Jeff's uncompromised behind-the-scenes leadership, the words of changing the world took on a different perspective, that which was rather unintentional, but nevertheless true. Jeff was convicted in 2006 on numerous counts of securities fraud, conspiracy, insider trading, and lying to auditors. Enron, Jeff, and other executives became synonims with corporate fraud and corruption, arrogance and hubris, aggressive rise and mind-blowing fall. Jeff still holds that he is not guilty of what happened to Enron, and fervently believes that Enron's fall was primarily due to the old-fashioned "run on the bank," partially attributing the cause to the tech bubble burst and terrorist attacks of 2001. While most people today simply dismiss the claims of Jeff's pleas of innocence, one may find Jeff's 24-year sentence to be particularly fair... or distrurbing?
Jeff, born in Pittsburgh, PA and raised in New Jersey and Illinois worked many hours cleaning floors at a local TV station in Aurora, Il. He later went on to pursue BS in applied science at Southern Methodist University, and after graduating form the university, earned his MBA from Harvard Business School, passing the interview by answering the question "Are you smart?" with an infamous answer "I'm fucking smart." Jeff was truly ambitious, while in prestigious consulting firm McKinsey & Co, he became the youngest partner in the firm's history. That's when he first worked with Enron on creating a trading platform that would later define Enron as not just a natural gas major, but also as a type of a clearing house, where Enron traders would match buyers and sellers of natural gas. While his idea was accepted by then Enron's CEO, Ken Lay, Jeff joined Enron as a CEO of his own unit: Enron Gas Bank. Jeff did not stop there, he went on to expand Enron's operations internationally, by building powerplants and acquiring various energy companies throughout the world. Jeff later led Enron into electricity market by acquiring an Oregon-based company, Portland General Electric. Jeff would eventually rise to COO position within Enron, but mostly assuming the duties and responsibilities of CEO, while having the actual CEO, Ken Lay, be rather a face of a company, but not the heart or the brains: those vital organs lyed in Jeff. The rest, as they say, is history...
While some may argue that Jeff is the architect of the collapse of Enron by lying and cheating off the general public and investors, both institutional and retail, Jeff neverthless to this day defends his innocence by what is now know as "Jeff Skilling Defense," or simply put "I didn't know anything!" defense. While some people may dismiss these claims, it is important to analyze why Jeff thinks he is innocent. On the one hand, he pushed Enron to embrace over-aggressive accounting standards that would later result in massive financial restatements and significant charges to equity, on the other hand, this was all approved by Enron's auditor, Arthur Andersen, now a failed audit firm as a result of obstruction of justice linked to shredding Enron's audit documents. Still does the fact that Arthur Andersen signed off on these transactions made them conform to the GAAP (Generally Accepted Accounting Principles), and why Jeff, not an accountant, needed to worry about Enron's accounting when Arthur Andersen was fine with it? Those who know Enron's rise and fall, know that its revenues streamed from SEC-approved mark-to-market accounting, specifically reporting all revenues in one year from multi-year power contracts and valuing its investments and securities at their highest values, recording enormous gains, and then never recording a loss when their value dropped. That was all made possible by Enron's CFO, Andy Fastow, and his numerous special-purpose entities (LJM, LJM2, LJM3, JEDI, Chewco, Whitewing, etc.), but again Arthur Andersen and Enron's lawyers, Vinson & Elkins, gave their blessing on these entities and transactions, so Jeff didn't mind. Why would he, things were going so good! But, the question remains, is Jeff really guilty when his CFO, accountants, and lawyers said it was ok? Was Jeff's 24-year sentence given by the jury of his so-called peers, most of whom couldn't tell a difference between debits and credits, fair? Were prosecutors primarily after Jeff and Ken because Enron's collapse was so devastating, and people, including Enron's stakeholders, cried foul so loud that the case of fraud was unquestionable? Or was the sentencing of numerous Enron executives was just case of scapegoating? Ask why?