Jeffrey Skilling, 52, former CEO of Enron, now faces 24 years plus four months in prison for fraud, conspiracy and insider trading. This as a decade ago he transformed an unknown pipeline company into an energy-trading tsunami, driven by the accounting scheme he signed off on hiding huge debt and cash flow problems. And then the wave hit the wall.

Enron tumbled from the once seventh-largest company in the US to the living nightmare that lost billions of dollars in stock and retirement savings overnight. According to The New York Times, �the judge has also ordered Skilling to pay up to $45 million in restitution to Enron victims, $15.5 million to his lawyers, and $5 million to Enron shareholders. This will pretty much wipe out Skilling�s fortune.�

The judge gave the higher sentence �because he found that Mr. Skilling had lied to the Securities and Exchange Commission about the real reasons for his sales of Enron stock before the company�s collapse in December 2001. Mr. Skilling said he sold the stock only because of the impact on the market of the 9/11 terrorist attacks.�

U.S. District Court Judge Sim Lake said in sentencing Skilling, �As the many victims have testified, his crimes have imposed on hundreds if not thousands a life sentence of poverty.� Yet Skilling blamed it all on a �severe liquidity crisis,� not having �enough dry powder� to cover the explosion that followed his swift resignation as chief in August 2001, followed a month later by 9/11, an even greater disaster, with relevance to Skilling�s Enron as we will see.

This while courtroom witness Dawn Powers Martin, a 22-year veteran at the company�s credit union called him �a liar, a thief and a drunk� who �cheated me and my daughter out of our retirement.�

During 2001, California�s energy disaster also occurred thanks to Skilling�s Enron �manipulating the power market to make extra money out of California�s energy crisis . . ." See the BBC article for the details, including how �wholesale power prices rose by a factor of 10 and almost bankrupted three major utilities. The meltdown followed a deregulation of wholesale power which left price caps on consumer prices.�

His past ringing in his ears, Skilling left the court with an electric ankle bracelet under his trousers to monitor his moves. That is, until the Bureau of Prisons can get him a room behind bars. Skilling has asked to go to a medium security prison in Butner, NC. But, after all is said and done, one wonders still, what made Skilling (sounds like killing) run?

The Resume

In a February 12, 2001 Business Week cover story, Skilling presented a short-form �resume� to sum himself up . . .

Jeffrey K. Skilling

BORN
Nov. 25, 1953, Pittsburgh

EDUCATION
B.S., applied science, Southern Methodist Univ., 1973; Harvard MBA, 1979

CURRENT JOB
President and COO, Enron Corp.; becomes CEO on Feb. 12

FIRST JOB
At 13, was chief production director for an Aurora (Ill.) TV station

INTRODUCTION TO ENRON
Joined McKinsey & Co. after Harvard and worked with Enron in '87 to create the first forward market for natural gas

HOW HE'LL CHANGE AS CEO
"I'll probably have to be a little less blunt"

BROKEN BONES
Eight, including at least one from rock climbing. Broke his back while working one summer on an Illinois highway, which helped him avoid the Vietnam draft

SELF-EVALUATION
''I've never not been successful in business or work, ever''

FAMILY
Divorced; one daughter, 16, and two sons, 15 and 10.

Well, not exactly heartwarming. The long-form resume in the Business Week article noted that as Enron chief Skilling led execs and clients on a 1,000-mile dirt-bike trip through Mexico, returning home black and blue. Was he crash-prone? Or did the picture of the devil-may-care entrepreneur Skilling mask the controlling risk-manager who bumped Enron from $4 billion to purportedly $100 billion in revenues?

His Boy Wonder stint at the Aurora Illinois TV station in a way set the life-scene. He was hired to paint the walls after school. But, nascent tycoon that he was, he learned how to run every piece of equipment at the station. One day when the producer/director left in a huff, the 13-year old stepped in ready to do a man�s job. In his words, �I liked being successful when I was working and was smart.� And he wasn�t modest either.

After the Applied Science degree from Southern Methodist University in Dallas, Skilling worked for First City National Bank of Houston for two years, in operations then liability management, portents of things to come. In fact, he had to leave the bank when it went bust, that is when oil and real estate crashed and upset the lives of many Skilling colleagues. He credits that catastrophe �for his intense focus on risk controls at Enron.� The bank �had taken this enormous concentrated risk and wasn�t able to lay it off.� Exactly what he did a couple decades later.

Top of the class, graduating with his MBA from Harvard in 1979, Skilling joined McKinsey & Co. in Houston. He alerted execs there to one of his energy clients, Omaha-based pipeline company InterNorth, that had some overpriced gas contracts that could mean trouble. With Skilling�s help they came up with the first U.S. gas-marketing organizations.

After InterNorth and Houston Natural Gas merged into the good ship Enron in 1985, CEO Ken Lay hired McKinsey and Skilling to come up with some new products. In 1987, Skilling offered up the �first forward contracts� in the gas business to nail down financing.

For the unanointed, �first forward contracts� would be as Jim Davis describes in �Speculative Capital,� pages 2-3, �like a farmer might agree to sell his or her wheat, even before it is planted, for an agreed upon price, at harvest. The farmer knows the price of the crop in advance, and is protected from the price of wheat rising or falling. The farmer has transferred the risk of price changes in wheat to another party.� In short, it�s a way of hedging (gambling on) price, in this instance creating �gas futures.�

Meanwhile, Lay offered Skilling a job in the start-up trading business. Skilling took it.

He rose to CEO, outperforming Enron�s asset-development group, which unfortunately for them turned in smaller returns on expensive overseas power plants. From there, it was all uphill. �I knew this was big,� he said, �and getting bigger all the time.� Until it popped, one big gasbag.

But what did Skilling learn from all this, even as Andy Fastow came to him with many ideas to make money, mostly with offshore shell companies, to bury money, to make believe there was money, and to charge it as profit or as liability, as the wizards felt fit?

Pre-9/11 Insider Trading and Enron

The capper to Skilling�s Enron schemes comes in a brilliant article by Tom Flocco, with additional research by Kyle Hence: �Investment Espionage And The White House�Bush Administration Links To Pre-9/11 Insider Trading.�

The first thing of note was that �Central Intelligence Agency (CIA) spokesman Tom Crispell denied that the CIA was monitoring �real-time,� pre-September 11 stock trading activity within U.S. borders using such software as the Prosecutor's Management Information System (PROMIS) or the Echelon satellite monitoring system. However, when asked whether the CIA had been scrutinizing world financial markets for national security purposes, Crispell replied, �I have no way of knowing what operations are [being affected by our assets] outside the country� . . ."

But more to the Enron point, �A January 23, 2002, Houston Chronicle report revealed that Enron Corporation's top security team, including four former CIA officers and an ex-FBI agent, left the company to form a private firm, Secure Solutions International (SSI), while continuing with Enron via a consulting contract. John W. Presley, the FBI agent now heading SSI could not be reached for comment. But the team probed a �variety of allegations of fraud and other kinds of rule-breaking by Enron workers,� according to the Chronicle.�

In fact, �Team member and former CIA agent David M. Cromley's business biography at Enron listed him as Enron's director of business analysis,� the Chronicle reported, adding that Cromley gave Enron executives �detailed and unique information� allowing them to make �investments, sales of assets, joint ventures and [financial] products.�

�But no public information has been forthcoming as to whether such �detailed and unique information� or sensitive CIA software was used in conjunction with Enron's controversial off-shore investment products, or whether their missing assets may have been employed in what former German Minister of Technology, Andreas von Bulow, estimated at $15 billion in insider trading profits . . ." Additionally, we find . . .

�An examination of SSI's website reveals that its corporate members have �managed cutting-edge counterterrorism and counterproliferation operations for the CIA, implemented advanced technical information and security programs for the CIA, and conducted a wide range of investigations for the FBI,� while also �overseeing all security arrangements for several large gas pipeline companies.�� Looks like one big happy family. But . . .

�It is yet to be determined if Congress will publicly question CIA Director George Tenent as to whether CIA and FBI employees were �loaned� to Enron's corporate espionage program, involved in personal pre-9/11 insider trading, or merely relaying sensitive insider political information to others involved in prior knowledge of the attacks. . . .

�The fraud-racked Enron Corporation has had at least 20 CIA agents on the payroll in the last eight years. But while the Houston Chronicle reported the operatives as �former� CIA, a February 26, 2002, National Enquirer story quoted a top Washington insider familiar with several secret investigations into Enron, as reporting that they were given �leaves of absence without pay and put on the Enron payroll.�� So, either Enron was paying the CIA to spy on them, or the agency was helping Enron make a buck.

�The source added that Enron's CIA members used �info gleaned from a satellite project called 'Echelon,' which intercepted emails, phone calls and faxes with detailed business information,� adding that �pure and simple, [taxpayer-funded] U.S. intelligence agents were involved in corporate espionage.� Another Enquirer source with ties to the CIA revealed that �the cozy deal between Enron and the CIA allowed the 'on-loan' undercover operatives to return to the Agency's payroll before Enron's collapse.�" How prescient of them.

Bottom line, it would seem the Skilling-led Enron had their hands in 9/11 profiteering as well. If you were looking for a ray of redemption in Skilling�s epitaph, fuhgeddaboudit. Maybe Ken Lay might have something good to say about him. But excuse me, Lay�s dead. Especially now that his estate�s been released to the family.