Yes, I know Jeff Skilling. (I’ve never hidden that fact.) He worked directly for me on a study for Frito-Lay in his early days at McKinsey. And, yes, he is as smart and clever as advertised. And, yes, I still think the nub of the “Enron model” makes sense. Hey, at every turn today (think eBay) the idea is to reduce the abiding friction in every sort of market transaction; and that was Enron’s guiding idea.
Here’s a quote from an AOL posting a few minutes ago on Skillling’s 24-year sentence: “The former CEO’s arrogance, belligerence and lack of contriteness under questioning made him a lightning rod for the rage generated by the collapse of Enron in 2001.”
All true. Skilling, not Lay, created a “culture” of swashbuckling that I’m not unfamiliar with given 30 years’ residence in Silicon Valley. But the swashbuckling got out of hand—and I’m not surprised at that in a Skilling venture. And then “out of hand” drifted, then plunged toward illegal, then egregiously illegal (think California).
It’s easy to say that if JS had curbed his arrogance-belligerence he’d at least be facing less jail time. But then he wouldn’t be the Jeff who got in trouble in the first place.
So, with Grasso last week and Skilling this week, perhaps it’s mostly done.
I know Jeff, and thence I am sorry about his future, such as it is. Alas, I fear it was deserved—and I am even more sorry that Kenny Boy Lay won’t be in the cell next door.
NB: With some degree of regularity, comments at this Blog rail about Sarbanes-Oxley. Well, fine … but rail against Skilling & Fastow & Rigas & Rigas & Ebbers & Grasso. Don’t lay it off on Congress. Congress is by design (we call it the Constitution) late to act—and then moves, inevitably, to over-correction. It will ever be thus.