One thing that has amused me since news broke yesterday was the variety of comments on the various blogs and news sites regarding the Supreme Court decision. One funny trend: the screaming that this decision was a right-wing decision. This boggles the mind. Ruth Bader Ginsberg wrote the majority opinion – not Antonin Scalia. All nine justices agreed that Skilling did not commit honest services fraud – an unusual meeting of the minds. (It was incidentally also a unanimous bench who cleared Arthur Andersen.)
Neither Ken Lay nor Jeff Skilling were in the pocket of George W. Bush. Yet people who don’t really think too deeply about these matters always connect Enron with the right wing. How preposterous. But even the most die-hard partisans (on either side of the aisle) can’t make a cogent argument that Enron was either left or right. And the fact was, Enron was a company made up of thousands of people. The people who worked there were as varied in their political opinions as anywhere else.
But let me put this old yellow dog to rest: Enron was never closely allied with George W. Bush. Enron gave money to both parties. Ken Lay was closer to George Bush, Sr – not W. And if there was any fraud (which there wasn’t), it would have been done under the benevolent gaze of Bill Clinton since Enron collapsed just eight months after Bush took office.
Lastly, when Enron desperately needed help, they begged the Bush administration for help and the Bush admin turned them away. Washington shut its doors and its ears to the pleas of Ken Lay. So if they were “allies”, George Bush had a funny way of showing it.
And now that honest services was severely weakened, leftists are wailing that this is a right wing plot. Never mind that Supreme Court justices are intentionally removed from politics. Never mind that one of the most liberal judges ever to preside on the Supreme Court wrote the opinion, or that a very liberal justice – Sotomayor – wrote a dissent based on Skilling’s civil rights being trampled by not having a change of venue, somehow this is all a vast right-wing conspiracy to screw over the little people.
When anyone immediately goes political when discussing Enron, I know they’re a kook and I know they know absolutely nothing about the company or the people who worked there. It’s like saying that Ken Lay is still alive. I immediately know that you’re not worth the time to argue with you. It’s that pronounced..
The Supreme Court ruling doesn’t favor either political party. It wasn’t born of a political ideology. To imply otherwise only makes you look foolish.
Yesterday when I was still reading the US Supreme Court decision Skilling v. USA, one of the first things that jumped out at me before I could even determine how they had resolved Skilling’s case was the fact that Sonia Sotomayor dissented from the majority position on the question of a fair venue for Skilling’s trial. The Chron today has an article by Tom Fowler about exactly this subject.
She also noted the scale of local media coverage, including that of the Houston Chronicle, with nearly 4,000 articles on Enron.
A presumption of guilt became so “deeply ingrained in the popular imagination” that it found its way even into sports columns and a weekly Chronicle feature on pets up for adoption, Sotomayor notes.
She agreed that the courtroom proceedings were conducted in an appropriately solemn manner, that the jury pool was large enough to find an unbiased jury and that media coverage did not contain a “smoking gun” piece of evidence.
But she said the jury selection process – which began with a 14-page questionnaire with 77 questions sent to potential jurors beforehand and ended with just five hours of questions in the courtroom – was ultimately inadequate given the “extraordinary circumstances” of the case.
The argument that acquittal on nine insider trading counts proves the jury was impartial “mistakes partiality with bad faith or blind vindictiveness,” Sotomayor wrote. “Jurors who act in good faith and sincerely believe in their own fairness may nevertheless harbor disqualifying prejudices. Such jurors may well acquit where evidence is wholly lacking, while subconsciously resolving closer calls against the defendant rather than giving him the benefit of the doubt.”
I must admit I get a little twitchy when Supreme Court justices use words like “subconsciously” in their opinions, but overall, I agree completely.
The issue of venue is a serious one, and I believe it is one of the few circumstances in which you can say, “if you weren’t there, you wouldn’t understand.” The massive media coverage, stoked by the Chron’s own Loren Steffy and others, deeply impacted Houston and the way its citizenry thought about Enron. Plus, Judge Lake’s anemic voir dire was just unconscionable. Reading the transcript of the voir dire, one comes away astonished that potential jurors who openly admitted their bias (and then meekly assured the lawyers they could still be unbiased in the jury room) could have possibly been allowed to serve on any jury – much less one as complex as the Skilling / Lay case.
Though Skilling ultimately lost that argument, I am pleased that Sotomayor saw things the correct way.
In any case, the Chron article is short but probably valuable. Check it out.
Shockingly, the members of the Enron Task Force have remained silent in the wake of the Supreme Court ruling that partially vacated his honest services convictions. Actually it isn’t shocking. Would you want to give a public statement after basically seeing your entire prosecution crumble in your hands? Thought not.
I marvel at the Enron Task Force’s record. Out of thirty-six defendants, they got exactly one jury conviction that has stuck – Jeff Skilling – and today that was severely weakened.
Why? If Enron people were so awfully guilty, shouldn’t their record reflect that? Shouldn’t the bodies be piled to the rafters? But no.
They’ve managed to do a terrific job cowing defendants into taking plea deals. They’ve destroyed plenty of lives but they’ve done an absolutely dismal job convincing juries that Enron defendants committed crimes. And thank heavens for that. The Enron executives are innocent. All of them.
So I guess it makes sense they’d be quiet.
The Supreme Court ruling today opens the door for another trial, which I know for a stone-cold fact will not end well for the prosecution. I know they will not be able to rely on many of the same prosecution witnesses, and they can’t threaten them with indictment. It will be a bloodbath for them if they attempt to re-try Skilling.
I almost wish I could see it just for the shame it would bring on the prosecutors. But not quite. It is time to let Skilling come home and get on with his life.
I’m still in shock. I knew this day would come but I didn’t realize how confused I’d be. I want very much to be happy, but I fear two things. The first is that the Supreme Court specifically said that this decision did not specifically require the courts to set aside Skilling’s convictions. Secondly, they upheld the conspiracy conviction. How frustrating.
An intriguing paragraph from the article in the Chron (which, incidentally, was featured rather prominently in the opinion itself):
In an important footnote the Supreme Court notes that the 5th circuit already said that it must set aside Skilling’s conspiracy conviction if any of the three prongs of that conviction, honest services being on, is legally insufficient, those charges must be set aside. But the high court specifically says the lower circuit is mistaken and must take a fresh look to see if any of Skilling’s convictions should be over turned.
So today, bottom line, is nothing really dramatic happened. They aren’t going to open the doors and let Jeff Skilling walk out today. But the case gets bounced back to the 5th Circuit, and it’s possible that the same court that basically had the same instructions in the Yeager decision, could vacate even the conspiracy count against him.
The SCOTUS decision which could spring Jeff Skilling from prison and overturn Honest Services is expected on Thursday. The Supreme Court issued a statement on Friday that it would publish its decisions on Monday and Thursday. Today’s decisions did not include Skilling v. USA so Thursday is our day.
The WSJ gave the Supreme Court the business today about procrastinating over several important rulings, including Jeff Skilling’s honest services-based appeal.
Good call, WSJ. But where were you when it took eleven months to get a ruling from the Fifth Circuit on his first appeal?
I don’t know what it is about Jeff Skilling but the courts seem to be paranoid about ruling on his cases. The Fifth Circuit was unconscionably slow. They then refused an en banc appeal – that isn’t uncommon, actually, but it took a long time to even rule on that when they normally take a week or two. Then the SCOTUS agreed to hear Skilling on March 1 and we’re still waiting for a ruling.
My best guess: they clarify the honest services statute. Skilling will get another trial.
But if the progress to date is any guide, Skilling will be an old man by then. Come on, SCOTUS. A man’s life is at stake. Let’s show some enthusiasm for justice!
The Supreme Court yesterday heard two arguments on Honest Services – first from Conrad Black, then Bruce Weyhrauch. The comments from the justices sound similar to language used before they clarified Collateral Estoppel in the Scott Yeager case, which effectively made it impossible for the government to retry him. Skepticism came from both Republican and Democrat appointed justices, with even Anton Scalia saying he doubted that honest services could be understood by an average person.
The Chron reported on it as it relates to Jeff Skilling, whose oral arguments will be heard before the SCOTUS next spring:
Not all of Skilling’s convictions rested on the honest services legal definition, so even if he is successful before the Supreme Court on that issue, that alone would not result in a full retrial.
I disagree with the first clause of this sentence. Every single count against Jeff Skilling relies on the assumption that Jeff Skilling knew he was involved in fraud at Enron. Of course, he wasn’t. His insider trading, fraud, and conspiracy counts all depend on the prosecution’s theory that Jeff Skilling was the ‘mastermind’ of a grand scheme which would deprive Enron of his honest services.
Skilling points out that he never benefited from his alleged crime. At the oral arguments at the Fifth Circuit, Petrocelli told the justices that never has an increase in stock nor any executive compensation been considered “enriching” a defendant. One must enrich oneself outside the bounds of normal employment. Skilling did NOT. He left nearly seventy million dollars on the table. He declined an offer to have Enron forgive a $2 million loan. He demonstrably acted in Enron’s best interest – not his own. He begged Greg Whaley to take him back to Enron when it was collapsing. He sold his ranch in Brazil – he didn’t buy more foreign real estate. He did not act like a criminal at any time, and he never, ever enriched himself at the expense of others at Enron.
I’m happy the Supreme Court will hear Skilling’s case, and I’d be willing to bet that he gets cut loose in June.
Finally, some good Enron news!
The court said Monday it will hear Skilling’s appeal of lower court rulings that upheld all 19 of his 2006 convictions of conspiracy, securities fraud, insider trading and lying to auditors involving the 2001 collapse of Enron.
Bloomberg reports that the Supreme Court has agreed to review the conviction of Conrad Black, the former Hollinger Inc. chairman who is serving a 6 1/2-year prison sentence for mail fraud and obstruction of justice.
Black, 64, was convicted in 2007 of stealing $6.1 million from the newspaper publishing company, and a U.S. appeals court upheld the conviction. Black and two other onetime Hollinger executives say the appeals court improperly expanded the scope of the federal mail fraud law, allowing a conviction even though the company wasn’t at risk of losing money.
“The jury was permitted to return guilty verdicts on the fraud counts even if it rejected the government’s main theory — that petitioners stole money from Hollinger,” the appeal argued.
Jeff Skilling’s attorney, Dan Petrocelli, had something to say about this development:
The Supreme Court’s ruling in the case also may affect former Enron Corp. Chief Executive Officer Jeffrey Skilling, who earlier this month raised similar issues in asking the high court to review his conviction.
“We think it’s a significant development, not just for Jeff Skilling’s case, but frankly for our basic system of justice in this country,” the former Enron executive’s attorney, Daniel Petrocelli, said today in a phone interview.
I hope Mr. Petrocelli is correct and that the Black case has some positive effect on Skilling’s.
Tom Kirkendall examines the Honest Services issue as it relates to Black and Skilling on his blog. It’s a great read. Highly recommend.
Jeff Skilling has filed his appeal with the Supreme Court to review his convictions that he says were based on the faulty honest services theory.
Skilling argues that a U.S. appeals court that upheld his conviction misinterpreted a federal fraud statute. His appeal also contends that pretrial publicity prejudiced the jury and led to an unfair trial.
More impressions of the Scott Yeager oral arguments at the Supreme Court have come in. Basically the consensus seems to be that the Justices appeared to favor Yeager, which, of course, is great news.
The transcript of the argument can be found here.
While scanning the transcript, I could detect the “spaces” where Buffone could have made some great points – the same misses that my first spy found.
I’m wary of guessing what any Justice thinks – it’s impossible to know the minutia of how they arrive at their conclusions – but based on the news reports, the transcripts, and what my peeps are saying, I think Scott Yeager and Rex Shelby have a good chance (maybe, 70%?) of prevailing on Yeager’s collateral estoppel argument. If indeed they win on this, it means that Shelby will have to go through an appeals process to have the new or clarified law applied to his case.
And it also means the Broadband Two will have won, and the Government will once again be handed a big slice of Failure Pie.
My spies at the Supreme Court have reported back. Though it’s always difficult to figure out what the Justices are thinking, the initial impression is that Scott Yeager’s attorney, Sam Buffone, gave a lackluster performance, missed several opportunities to make excellent points, and didn’t reply to several direct questions from the Justices.
Chron has a much more optimistic take, however. A quote from super liberal Justice Steven Breyer delivers the ray of hope that I was hoping for: “I can’t think of any reason for allowing the government a second bite at this apple,” Associate Justice Steven Breyer said during oral arguments in the case today.”
It’s my hope the article is closer to reality and that the Justices will rule that collateral estoppel must be applied in the case of Scott Yeager, and to Rex Shelby.
More as more details become available.
Scott Yeager’s Supreme Court oral arguments tomorrow will be conducted by Samuel Buffone. My personal opinion is that Yeager is in good hands on that score.
However, the more interesting aspect is who is fighting for the government to put Scott Yeager away – or at least send him back to trial. Mr. Michael Dreeben, Deputy Solicitor General, has a rather colorful history with Enron. He was the attorney who argued on behalf of the argument during the Supreme Court appeal with Arthur Andersen.
The government charged Arthur Andersen with violating a 1982 law, the Victim and Witness Protection Act, which makes it a crime for one person to “corruptly persuade” another to destroy documents in order to make them unavailable to the government. (Basically, since the government could not find anything really criminal, they accused a company of witness tampering. On the government’s theory, the violation occurred when Nancy Temple, an internal lawyer for Andersen who herself was not prosecuted, advised her colleagues to follow a policy of not retaining working papers and other audit material.)
At the Supreme Court, Dreeben claimed that Andersen had invoked its own document retention policy “as a pretext and cover to clean up and purge the files.” He added, “It was not because the company had suddenly become preoccupied with neatness.”
Yet the Supremes decided that whether or not Arthur Andersen was “preoccupied with neatness” was irrelevant; the jury had been improperly instructed, and thus, Arthur Andersen’s single conviction was overturned unanimously.
On the eve of this very important hearing, let us hope that Mr. Buffone and Scott Yeager soundly put this matter of collateral estoppel to bed once and for all with another victory for the Enron defendants – and hand Mr. Dreeben another SCOTUS defeat in an Enron skirmish… for the second time.