Jeffrey Skilling - Enron

Enron

Skilling started his career in Houston as an analyst for First City Bancorporation of Texas in Houston. First City was one of Enron's banks and just before it failed the first time, Skilling quit. The CEO of Collecting Bank, the FDIC's facility for managing the bad assets of First City, was Sam Segnar, the first CEO and chairman of Enron. The new First City Bank, headed by A. Robert Abboud, was also an Enron bank. Abboud was the former president of First Chicago Bank and Occidental Petroleum under Armand Hammer. First City was initiated by Judge James Andersen Elkins and his law partnership, Vinson & Elkins, one of Enron's main law companies. As a consultant for McKinsey & Company, Skilling worked with Enron during 1987, helping the company create a forward market in natural gas. Skilling impressed Kenneth Lay in his capacity as a consultant, and was hired by Lay during 1990 as chairman and chief executive officer of Enron Finance Corp. During 1991, he became the chairman of Enron Gas Services Co., which was a result of the merger of Enron Gas Marketing and Enron Finance Corp. Skilling was named CEO and managing director of Enron Capital & Trade Resources, which was the subsidiary responsible for energy trading and marketing. He was promoted to president and chief operating officer of Enron during 1997, second only to Lay, while remaining the manager of Enron Capital & Trade Resources. During 1999, Enron initiated EnronOnline, an Internet-based trading operation, which was used by virtually every energy company in the U.S.

During Skilling's management, Enron adopted "mark to market" accounting, in which anticipated future profits from any deal were accounted for by estimating their present value rather than historical cost. Skilling joked about the California energy crisis at one meeting of Enron employees by asking, "What is the difference between California and the Titanic? At least when the Titanic went down, the lights were on." Skilling later attributed the remark to frayed relations between Enron and California. His employees, meanwhile, plotted to keep the price of energy high in California.

Skilling began advocating a novel idea: the company didn't really need any "assets." By promoting the company's aggressive investment strategy, he helped make Enron the largest wholesaler of gas and electricity, with $27 billion traded in a quarter. On February 12, 2001, Skilling was named CEO of Enron, receiving $132 million during a single year.

On March 28, 2001, PBS's Frontline interviewed Skilling, where he claimed for Enron "We are the good guys. We are on the side of angels".

Skilling unexpectedly resigned on August 14 of that year, citing personal reasons, and he soon sold large amounts of his shares in the corporation. Then-chairman Kenneth Lay, who previously served as CEO for 15 years, returned as CEO until the company declared bankruptcy during December 2001. When brought in front of congressional committees, Skilling stated that he had "no knowledge" of the complicated scandal that would eventually result in Enron's bankruptcy.