Enron Scam Appeal Attracts Little Interest In Oregon Media

The Fifth Circuit Court of Appeals expected large crowds in its New Orleans courtroom yesterday for hearing convicted Enron exec Jeffrey Skilling's appeal. (It posted special instructions on its website for seating, "[n]o one will be allowed to enter any of the courtrooms prior to 1:00 p.m. ... to allow court staff to set up additional chairs in the East Court room, and prepare other courtrooms for overflow spectators." No extra seating was necessary. The on-lookers were mainly journalists and legal observers, not any of the thousands of shareholders and employees injured in the spectacular demise of Enron. Not much interest in Oregon newspapers either, even though there are many Oregon connections to Enron, one of the biggest business scandals in U.S. history.

Oregon/Enron connections: Enron was incorporated here and its collapse shattered the retirement accounts of almost 1000 workers and execs who were in Portland General Electric’s pension plans. PGE was a wholly owned sub of Enron, and Portland figures were involved in the collapse of Enron. There’s John Forney, an energy trader who invented electricity market manipulation strategies such as the "Death Star."

Joe Hirko, former chief financial officer for PGE, is awaiting re-trial in Houston for another scam relating to the Enron Broadband unit, the infamous “Project Braveheart.” John Kroger, a former federal prosecutor currently seeking the Democratic nomination for Attorney General, led the inquiry into Enron Broadband‘s fictitious earnings on a video-on-demand service for a year.

Skilling was convicted two years ago on fraud, conspiracy and insider-trading charges. He was sentenced to 24 years in prison.

Sounds like oral argument was a snoozer. But most of the argument seems to have dealt with "honest services" under the mail fraud statute--so no fireworks there. The original 1872 statute was amended (18 U.S.C. 1346 ) to allow prosecutions premised on using the mails to violate the duty to provide “honest services."

Federal prosecutors argued that Skilling was responsible for setting company goals and what he did defrauded shareholders, so that deprived shareholders of his “honest services." Some courts have been reluctant to allow a broad definition or application of “honest services,” so the chances for a reversal are hard to predict.

The hearings panel were Republican appointees: Hon. Jerry E. Smith (Yale law grad, Reagan appointee), Edward C. Prado (Texas law grad, George W. Bush appointee), and Alia Moses Ludlum (Texas law grad, George W. Bush appointee)

More at Houston Chronicleand White Collar Crime Prog blog.