HOUSTON—Former Enron Corp. Chief Executive

HOUSTON—Former Enron Corp. Chief Executive and felon Jeffrey Skilling is looking to get back into the energy business after serving more than 12 years in prison for his role in one of the biggest corporate scandals in history.

Just weeks after being released from federal custody following his 2006 conviction on fraud, conspiracy and insider-trading charges, Mr. Skilling has been holding meetings

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Ex-Enron CEO Skilling Plans Second Act Fresh out of prison, Jeffrey Skilling is meeting with Enron colleagues, others on new energy-finance venture

Former Enron CEO Jeffrey Skilling, center, arriving at the federal courthouse in Houston in 2006 for his sentencing hearing. PHOTO: ASSOCIATED PRESS

Updated March 22, 2019 5:33 p.m. ET

By Christopher M. Matthews and Katherine Blunt

Ex-Enron CEO Skilling Plans Second Act – WSJ https://www.wsj.com/articles/ex-enron-ceo-skilling-plots-second-act…

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with former Enron executives and others, hoping to win backing for a new energy venture, people familiar with the matter said.

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.

Enron was a highflying Houston conglomerate, with a powerful natural-gas and electricity-trading businesses and an ambitious early foray into broadband services, before it collapsed spectacularly in a matter of months in 2001 amid mounting questions about its accounting practices.

The Enron scandal led to dozens of indictments and the end 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.

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 reintroducing Mr. Skilling to the business community as a friendly courtesy.

Messrs. Skilling and Pai declined to comment.

He would be re- entering the world of energy finance at a time when


As Ex-Enron CEO Exits Prison, Some of Company’s Old Businesses Thrive (Feb. 24)

Behind Enron’s Fall, a Culture of Secrecy Which Cost the Firm Its Investors’ Trust (Dec. 5, 2001)

Energy Traders Cite Gains, But Some Math Is Missing (Sept. 20,2000)

Ex-Enron CEO Skilling Plans Second Act – WSJ https://www.wsj.com/articles/ex-enron-ceo-skilling-plots-second-act…

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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.

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, Enron sought bankruptcy protection.

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 Securities and Exchange Commission judgment, Mr. Skilling is permanently barred from serving as an officer or director of a publicly held company.

Ed Hirs, an energy fellow at the University of Houston who earlier served on the Enron Task Force assessing damages from the collapse, said he was surprised that Mr. Skilling would be attempting a new business venture. Nevertheless, he added, Mr. Skilling was an intelligent man who had paid his debt to society.

“All it requires for him to get back into business is someone to back him,” Mr. Hirs said. “Certainly his options are limited. But there’s no reason…why he shouldn’t go on and with any luck succeed.”

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

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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 SEC 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.

Peter Henning, a professor at Wayne State University Law School who earlier served as a prosecutor at the U.S. Department of Justice, said that Mr. Skilling’s energy expertise could appeal to investors so long as the business venture doesn’t violate the terms of his SEC judgment. He added that focusing on newer investment platforms such as cryptocurrency could prove ideal for a second start.

“It’s an area without a long memory,” he said. “In the cryptocurrency space, no one is going to care too much about Enron.”

Write to Christopher M. Matthews at christopher.matthews@wsj.com and Katherine Blunt at Katherine.Blunt@wsj.com

Appeared in the March 23, 2019, print edition as ‘Ex-Enron Chief Has New Plan.’

Copyright © 2019 Dow Jones & Company, Inc. All Rights Reserved

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