White-Collar Crime

Ruling Gives Skilling Chance to Raise Prosecutor Misconduct Claim

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A federal appeals court opinion ordering a new sentence for former Enron chief executive Jeffrey Skilling gives his lawyers another chance to argue for a new trial.

Yesterday’s opinion overturning Skilling’s 24-year-sentence for fraud and conspiracy said U.S. District Judge Simeon Lake III had incorrectly applied sentencing guidelines and ordered him to reconsider.

But the opinion by the New Orleans-based 5th U.S. Circuit Court of Appeals also left open the possibility of a claim of prosecutorial misconduct, the New York Times reports.

Skilling had argued his conviction should be overturned because the FBI had failed to turn over interview notes with star prosecution witness Andrew Fastow, the former finance chief at Enron. When Lake reviewed the notes to see if they needed to be disclosed to Skilling, prosecutors failed to submit a page in which Fastow told agents of a discussion he had with Skilling about a list, according to the Times account. Skilling’s lawyers contend the list concerned a deal that played a major role at Skilling’s trial, while prosecutors claim it was a different transaction that was not part of the case.

The appeals court said it couldn’t consider the claim because Lake never saw the page at issue. “Thus, there is nothing for us to review,” the court said in its 105-page opinion (PDF). “Skilling must bring this claim to the district court before we can address it.”

Skilling’s lawyer, Daniel Petrocelli of O’Melveny & Myers, said he planned to ask for a rehearing or to appeal the case to the U.S. Supreme Court, the Associated Press reports.

He noted that the prosecution theory in Skilling’s case—that the CEO had deprived the company of honest services—had been struck down in other Enron appeals on the ground that the employees had been acting in the company’s interest. Petrocelli told AP that Skilling was unfairly being singled out.

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