Ex-Enron CEO Skilling plans second act

WASHINGTON, : Former President and CEO of Enron Jeffrey Skilling walks to his seat to testify 07 February 2002 on Capitol Hill. Skilling testified before the House Committee on Energy and Commerce. AFP PHOTO/Stephen JAFFE (Photo credit should read ST

Former Enron Corp. Chief Executive Jeffrey Skilling is looking to get back into the energy business, with a little help from his friends.

Just weeks after serving more than 12 years in federal custody on fraud, conspiracy and insider-trading convictions following Enron's fall, Mr. Skilling has been holding meetings with former Enron executives and others, hoping to win backing for a new energy venture, people familiar with the matter said.

At least one former colleague has agreed to support Mr. Skilling's comeback attempt: Lou L. Pai, the onetime head of Enron's energy- services unit, has pledged to invest in the venture and indicated to others he is involved with Mr. Skilling, the people said. A person familiar with Mr. Pai's thinking said Mr. Pai was re-introducing Mr. Skilling to the business community as a friendly courtesy.

Messrs. Skilling and Pai declined to comment through a representative.

The exact nature of the project is something of a mystery, with the people briefed saying it was at an early stage. Some of those who have met with Mr. Skilling have signed nondisclosure agreements, the people said. Several described it as a digital platform connecting investors to oil and gas projects.

Mr. Skilling has met with individuals who specialize in cryptocurrency, blockchain and software development in recent weeks, two of the people said.

He would be re-entering the world of energy finance at a time when some oil and gas producers have been having trouble securing backing. In 2018, new bond and equity deals for the sector dwindled to the lowest level since 2007.

A former McKinsey & Co. consultant, Mr. Skilling, 65, helped Enron pioneer a structure known as the "Gas Bank" to buy gas from producers and sell it to large customers, seizing on the opportunity created by the federal government's deregulation of gas markets. He then joined the company in 1990 to run that venture.

Mr. Skilling earned an MBA from Harvard Business School in 1979, graduating in the top 5% of his class. Before his trial and conviction, he was known as a formidably intelligent and aggressive visionary who transformed Enron into one of the nation's most competitive workplaces.

In February 2001, he became Enron's CEO, only to resign about six months later. Before the end of the year, the once highflying conglomerate had sought bankruptcy protection amid growing questions about its accounting practices, in one of the most spectacular corporate collapses in American history.

The Enron scandal led to dozens of indictments, and the collapse of accounting firm Arthur Andersen. It also upended much of the U.S. energy-trading business for years and prompted tighter corporate governance and reporting requirements, including the Sarbanes-Oxley Act.

Mr. Skilling, who was convicted in 2006 of lying to investors about Enron's financial health and sentenced to 24 years in prison, has consistently maintained his innocence. He reached an agreement with prosecutors in 2013 to drop his appeals if they recommended a lighter sentence.

It is unclear how much Mr. Skilling retained of the money he made at Enron, which topped $100 million, according to court documents. Under his conviction, he was ordered to pay about $42 million in restitution and court filings show he spent more than $20 million on his legal defense. As part of a separate SEC judgment, Mr. Skilling is permanently barred from serving as an officer or director of a publicly held company.


Mr. Skilling began thinking about his next business venture while serving time in an Alabama prison camp, and was already taking meetings on the project while serving six months at a Texas halfway house before he fully regained his freedom last month, two people who have met with him said.

He is now back in Houston and working out of an office near the city's exclusive River Oaks neighborhood, home to some of the energy world's richest executives. He has met with more than two dozen former Enron executives, according to one person who had seen Mr. Skilling, who added that the former CEO has been encouraged by what he viewed as a warm reception.

Among them is Mr. Pai, who resigned from Enron in June 2001 after selling hundreds of millions of dollars of stock to meet a divorce settlement. Enron's stock averaged around $54 a share at the time of some of Mr. Pai's sales in the spring 2001; it was worth just 40 cents by Dec. 3, 2001, a day after the company filed for bankruptcy.

Mr. Pai agreed to a $31.5 million settlement to resolve civil insider-trading charges with the Securities and Exchange Commission in 2008. Under the settlement, he didn't admit or deny the SEC's assertion that he avoided huge losses by selling nearly a million shares of Enron stock, knowing nonpublic information about financial troubles affecting an Enron division he previously headed.

After leaving Enron, Mr. Pai was a silent backer of Element Markets LLC, a Houston-area firm prominent in brokering pollution-emission credits. The company said he is no longer involved.

Mr. Pai remained close with Mr. Skilling following Enron's collapse and spoke to Mr. Skilling throughout his time in prison, said two people briefed on Mr. Skilling's plans.