Former Enron Chief Executive Skilling Said to Be Indicted on Criminal Charges

Jeffrey K. Skilling, chief executive of Enron Corp. until shortly before it imploded in 2001, was indicted on criminal charges late Wednesday, according to a source close to the case.

Skilling was expected to surrender to the FBI this morning, after which he would appear before a judge at the downtown federal courthouse here for arraignment.

The exact nature of the sealed charges against Skilling wasn’t clear late Wednesday. They could accuse him of participating in or authorizing off-the-books financing schemes used to pump up Enron’s profit and stock price.

If this morning’s expected surrender follows the pattern of other indicted senior executives from Enron, Skilling would first go to the FBI office, where he would be placed in handcuffs and taken to the courthouse by federal agents.

That would provide the media and the public with the so-called perp walk, something that has become a familiar sight for corporate chieftains in the last few years.

“There are theatrics to it, and prosecutors can make it easy and they can make it hard -- depending on how much of a show they want to create,” said former federal prosecutor Kirby Behre, now a criminal defense attorney in Washington. “Obviously, the temptation to create a sideshow with someone of Skilling’s level is greater because there’s been some criticism of the pace of this investigation.”

Skilling began his career at Enron in 1990 and was a significant force in its development into an energy and trading company that at one point ranked seventh on the Fortune 500 list. He became chief executive in early 2001 and resigned six months later, citing personal reasons. Enron filed for bankruptcy protection in December 2001.

The charges against Skilling would come two years after he appeared before Congress to insist that Enron’s spectacular collapse -- and the destruction of more than $68 billion in shareholder value -- came as a complete surprise.

“I am not one of the perpetrators,” he told the Senate Commerce Committee. One of the few executives to testify instead of taking the 5th Amendment, Skilling was strident in defense of himself and others.

“The entire management and board of Enron has been labeled everything from hucksters to criminals, with a complete disregard of the facts and evidence assembled,” he said. “These untruths shatter lives.”

Since then, the 50-year-old Skilling has been almost completely silent. He has assembled a high-powered legal team that is anchored by Daniel Petrocelli of O’Melveny & Myers in Los Angeles. Petrocelli is best known for his role as lead counsel for the family of Ronald Goldman in its case against O.J. Simpson, which resulted in a $33.5 million wrongful-death judgment.

Neither Petrocelli nor another Skilling attorney, Bruce Hiler, returned calls Wednesday.

The indictment comes one month after former Enron finance chief Andrew S. Fastow pleaded guilty to two counts of conspiracy to commit wire and securities fraud. Sources familiar with the Skilling investigation said Fastow had spent considerable time in recent weeks helping the Justice Department’s Enron task force build their case.

In return for Fastow’s cooperation, prosecutors have said they would recommend a 10-year term. His sentencing is April 19.

Former Enron Chairman Kenneth L. Lay hasn’t been charged in the scandal.

Calvo reported from Houston and Times staff writer Streitfeld reported from San Francisco.