Michael Stravato for The New York TimesJeffrey K. Skilling, the former Enron chief executive, at his 2006 trial in Houston.8:27 p.m. | Updated
Jeffrey K. Skilling, imprisoned for the last six years because of his role in the fraud that caused the collapse of Enron, has reached a deal that could reduce his sentence by more than a decade.
As part of the agreement with the Justice Department, the former chief executive of the energy giant will waive his rights to any further appeals. In addition, he has agreed to allow more than $40 million of assets that were seized from him to be distributed to victims of Enron’s failure.
Employees lost their retirement savings and shareholders lost billions of dollars after the once highflying company slid into bankruptcy in 2001.
Under federal prison rules, Mr. Skilling — who had been sentenced to 24 years and 4 months — could leave prison as soon as 2017.
The agreement is still subject to approval by Judge Simeon T. Lake III of Federal District Court in Houston, who oversaw Mr. Skilling’s trial in 2006. Though the judge has some discretion over the ultimate length of the sentence, either side can appeal if he goes outside the guidelines. A resentencing hearing has been scheduled for June 21.
If approved, the pact would conclude Mr. Skilling’s long legal battle with the government over his role in Enron’s implosion. Convicted of fraud and conspiracy, the onetime Enron leader, who is now 59, was the highest-ranking executive of the Houston-based company to serve a prison sentence.
Kenneth L. Lay, Enron’s chairman, was also found guilty, but he died just over a month after the trial.
Andrew S. Fastow, the company’s former chief financial officer, was released from prison in 2011, having served about five years under the terms of a plea agreement.
“The proposed agreement brings certainty and finality to a long painful process,” Daniel M. Petrocelli, a lawyer for Mr. Skilling, said in a statement. “Although the recommended sentence for Jeff would still be more than double any other Enron defendant, all of whom have long been out of prison, Jeff will at least have the chance to get back a meaningful part of his life.”
Peter Carr, a spokesman for the Justice Department, said in a statement that “this agreement ensures that Mr. Skilling will be appropriately punished for his crimes and that victims will finally receive the restitution they deserve.”
The negotiations on the prison sentence followed a Supreme Court ruling in 2010 that questioned the use of the “honest services” law that helped convict Mr. Skilling, finding it unconstitutionally vague. A federal appeals court subsequently ruled that Mr. Skilling’s conviction was not tainted by the use of the legal theory, concluding that there was “overwhelming evidence” that the executive had conspired to commit fraud.
But the appeals court also ruled that Mr. Skilling needed to have his sentence recalculated. The resentencing had been postponed while his appeal worked its way through the courts.
Mr. Skilling — a onetime McKinsey consultant who joined Enron in 1990 and then quickly climbed the ranks — transformed the company from a pipeline operator into a global energy-trading giant. But after accounting schemes that hid the company’s debts and cash-flow problems came to light, he became a symbol of corporate wrongdoing. Several Enron subordinates testified at Mr. Skilling’s trial that their former boss helped foster an environment that allowed fraud to bloom.
Enron led a wave of accounting scandals that emerged after the great Internet and telecommunications boom of the late 1990s fizzled. The crumbling of onetime titans led to thousands of lost jobs and a plunge in the stock market. In 2005, Bernard J. Ebbers, the former chief executive of WorldCom, was sentenced to 25 years for an accounting fraud at his telecommunications company, while John J. Rigas of the cable company Adelphia Communications received a 15-year sentence.
The collapses of Enron and WorldCom helped change the way government approached white-collar crime and prompted Congress to pass the Sarbanes-Oxley Act on corporate accountability.
Mr. Skilling, now also known as prisoner 29296-179, first began serving his sentence at a prison in Waseca, Minn. He was subsequently moved to an institution in Littleton, Colo., after the Minnesota facility was converted into a women’s penitentiary.
As of Wednesday afternoon, the Federal Bureau of Prisons Web site projected his release on Feb. 21, 2028.
Peter Lattman contributed reporting.
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