Former Enron bosses Kenneth Lay and Jeffrey Skilling face a lifetime behind bars after a Texas jury found them guilty of fraud and conspiracy in one of the biggest corporate scandals in American history, writes, Denis Staunton, Washington.
Lay was found guilty of all six counts against him and Judge Sim Lake also convicted the Enron founder on separate charges of bank fraud and he could face up to 165 years in prison. Skilling was found guilty of 19 out of 28 charges of fraud, which could lead to a sentence of 185 years in prison.
The verdict came after only a week of deliberations following a trial that lasted nearly four months. Lay clutched his wife's hand as she sobbed while the verdict was read but Skilling remained impassive.
"We fought a good fight. Some things work and some things don't. Obviously, I'm disappointed. But that's the way the system works," Skilling said as he left the courthouse in Houston.
Both men have been ordered to post a $5 million bond and Lay has been told to hand in his passport to the court pending sentencing on September 11th. Lawyers for both Lay and Skilling said they would appeal the verdicts.
Once America's seventh largest company, Enron collapsed after it emerged that an estimated $40 billion of debts had been hidden in secret accounts to protect the firm's core balance sheet. Enron had more than $68 billion in market value before its bankruptcy wiped out more than 5,000 jobs and at least $1 billion in retirement funds.
The jury concluded that Lay and skilling had repeatedly lied to cover up accounting stratagems and failing ventures at Enron. Jurors rejected Skilling's claim that no fraud occurred at Enron other than that committed by a few executives in secret side deals, and that hostile media coverage and a nervous market combined to bring down the company.
Former Enron employees reacted with delight to the verdict, which Deborah Perrotta, who worked as an administrative assistant in the company, described as fantastic.
"It's a victory to show that corporate America can't get away with misleading the public and employees for their own personal gain," she told CNN.
Debra Johnson, another former Enron employee, said the verdict was about being fair to ordinary working people.
"Skilling and Lay thought the money, the power was everything. This will let executives at other corporations know that it can happen to them. This is a milestone. And it's well deserved. We waited long enough. I'm smiling as I talk to you. I wish I'd been able to be there," she said.
The Bush administration also welcomed the guilty verdicts and White House spokesman Tony Snow congratulated the Justice Department and prosecutors on securing the convictions.
"The administration has been pretty clear there's no tolerance for corporate corruption and, furthermore, the Justice Department has been going aggressively after those who are involved in corporate corruption," he said.
The Enron trial was the most high-profile case in a succession of scandals that have rocked corporate America in recent years, which have seen executives from such giants as WorldCom and Tyco sentenced to lengthy jail terms. Christopher Cox, chairman of the Securities and Exchange Commission, said it sent an important message to businesses and investors alike.
"It is a victory for all Americans whose jobs and economic security depend on the integrity of our capital markets. The verdict makes clear that high-level corporate executives who deceive the investing public for personal gain will be held fully accountable," he said.
The trial pitted former colleagues against one another. The government had secured plea deals with, among others, the former finance chief Andrew Fastow, who will serve a slimmed down sentence of 10 years in prison after admitting that he helped orchestrate the fraud, skimming off $45 million for himself in the process.
Among the government's other star witnesses was Sherron Watkins, the mid-ranking accountant whose warnings internally had been ignored, and the former head of investor relations, Mark Koenig.