Next month will mark my second anniversary of being involved in-depth with the accounting profession. And I don’t think much more than a work day has ever passed without Jeffrey Skilling popping up in some fashion or another.
Skilling, the former Enron chief executive who was sentenced to 24 years in prison on Monday, was pretty much the last man standing after nearly five years of investigators and prosecutors working to unravel exactly what led to the energy giant’s historic financial collapse.
Founder and former chairman Ken Lay died of a heart attack in July; former chief financial officer Andrew Fastow flipped on his colleagues, and after a star turn on the witness stand, was rewarded with a light sentence of just six years in jail; a host of others received heavy, but not insurmountable fines, and next-to-nothing in terms of prison time.
Reflecting back, it was probably the indictment of defunct Big Five firm Arthur Andersen that resulted in the highest toll taken from involved individuals -- and that broad action of taking down the entire organization undoubtedly harmed more innocent employees, than punished complicit employees.
Not to suggest that the scandal didn’t weigh heavily on those individuals, but when the jury arrived at its guilty verdict for both Skilling and Lay in May -- even then I was left feeling a bit melancholy -- this was what justice looks like? Two men, likely to sit in prison well into their 70s, and 80s, respectively? The victims of Enron, many who lost their livelihoods and retirement plans in one fell swoop might have rejoiced in winning some sort of a moral victory, but the legal battle to reclaim even some small percentage of their financial well-being will surely drag on for several more years.
Whether Skilling has to report to prison in a few days or a few months, he has promised to continue fighting his conviction and pursuing other avenues for appeal. In the past few days, I’ve heard more than a few people -- from victims of his fraud, to observers far outside the accounting profession -- comment on Skilling’s supposed brazenness in continuing to take no responsibility and show no remorse for his actions.
I always tell them about hearing Public Company Accounting Oversight Board member Charles Niemeier speak at a conference just last month. “What really scares me about Enron is that so much of what they were doing was right," Niemeier told a roomful of accountants. "It was just that towards the end, they got sloppy.”
So I don’t know if I’ll sleep all that much sounder at night knowing Skilling’s going away for what could be a life sentence. And I don’t know if any amount of money will ever give back Enron’s former workers their sense of security. And I don’t know if I can truly trust that, with or without more tweaks, the Sarbanes-Oxley Act will ever be capable of legislating earnings manipulation out of existence.
In a lot of ways, just like the accounting profession, I’ll be an active observer in the game of wait-and-see what’s coming next -- but something tells me I’m right in not yet having achieved a sense of closure.
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