The Business Ethics Blog

This is Part 2 of Chris MacDonald’s interview with Walt Pavlo, on the 24-year jail term recently handed to Jeff Skilling. Pavlo spent two years in jail for fraud and money laundering at MCI. Pavlo isn’t an expert on sentencing, or on Enron. But he has a special perspective on what leads people to commit white-collar crimes, and what it’s like to go to jail for it.

Part 1 of this interview was posted last week. Part 3 will go on-line tomorrow.

(Note: the following has been edited for clarity and length, but I’ve also tried to retain the informal character of the conversation.)

Business Ethics Blog: Interview with Walt Pavlo, Part 2

Busienss Ethics Blog: Another reason we put people in jail is to ‘incapacitate them,’ to separate them from the public so that they can’t do harm. Was a 24-year-sentence necessary for that, in Skilling’s case?

Walt Pavlo: I don’t think so. I think that you learn your lesson in prison in a few years. I mean, particularly for someone who’s intelligent. I’ll give Skilling credit, he’s obviously a well educated guy, he’s not mentally ill, like a number of people who are in prison, and he certainly has the ability to reflect on the impact this has on his life and it doesn’t take 24 years to do that.

A long sentence for him, that I believe would have allowed him to reflect, could have been 5 to 10 years. You know, prison is more of a self-paced program. There’s nothing in there except the onus on the individual to look at their actions.

I can’t imagine that Skilling is going to spend 24 years in prison thinking about how wrong he’s done things and come out a different person. I think that he will, in the short term. But then over a long period of time he’s just going to lose contact with society and just become institutionalized in many ways.

BEB: So you don’t think this is a place where there’s much hope for rehabilitation?

WP: No, I don’t even see what the impact would be, even if it was positive, what it would accomplish at the other end. He’s going to be a broken man when he gets out. He’ll be in his 70’s if he exits alive, and he certainly can’t work again. I don’t know what that accomplishes. One strike and you’re out, in his case. It’s a big strike, but that’s it. First offense, only offense, last offense.

BEB: When I heard you speak this summer in Tulsa, you said that in your own case, your jail sentence was not the main penalty. The main penalty was the effect your criminal record has on the rest of your life. Skilling will likely be in jail for most of the rest of his life. How does your comment apply to him?

WP: Well he is not going ever be able every to demonstrate publicly or in society what he did wrong. And I think because of the length of his sentence, probably he’s not going to be in the frame of mind to tell anybody he’s sorry. It’s like, ‘hey, you guys have sent me here for the rest of my life…’ and I think the length of his sentence, in a way, is going to prevent him from coming forward and saying ‘you know I really did screw up, I really did do something wrong and here’s what I learned from that.’

I think all that stuff is just going to waste away with him in prison and I think that’s unfortunate, and I think there are a lot of valuable lessons – they might be in greed – but they’re just going to go away with him and we’re just going to see a man who’s bitter and goes away and takes every secret with him, about what went wrong that we could all learn from. And that’s sad.

BEB: After you got out of prison, you decided to try to do some good by speaking to business students, telling your story, and letting it serve as a warning. Do you think Jeff Skilling can do anything positive with the rest of his life, given where he’s going to be?

WP: It would be miraculous. It’s difficult for me to do it, and I say that because so few white collar criminals who’ve been convicted do that. There’s no incentive for him to do that. For him to try to make a positive impact, there’s nothing he’s going to get out of it. He’s not going to come home any earlier.

Over time, I see him becoming more bitter, or just succumbing to it, and never being able to share with us what that is, good or bad. It’s just going to go away with him.

The only version of events we’ve seen is the Prosecution’s side and a defense that quite honestly just didn’t make sense to people. We’d rather say, ‘Can you be honest with us for a moment and tell us what went wrong? A lot of people lost a lot of money. We don’t want this to happen again. You need to be punished. But can you tell us what happened, what your thoughts were, so we can learn from it?’ And I think all of that’s going to be lost.

BEB: What do you make of Skillings’ apparent lack of remorse? You know, he’s said, ‘I’m sorry that people got hurt,’ but he hasn’t expressed any remorse for his role, he hasn’t sort of said ‘yeah, you know I screwed up.’

WP: Those are questions, Chris, that get back to this very long sentence: the guy was fighting for his life. I think if you put any person in that situation, where he just felt like he had to defend his character, or whatever, or really defend himself so that he wouldn’t be put away for the rest of his life. He had to adopt that strategy, because the alternative was such a long time in prison.

That’s a fine line. Where do you provide an incentive for someone to be honest, and still punish them, and allow them to really tell a story and be remorseful and let us critique it: you know, is he really sorry? Did he really tell us anything? And I think, again, his story is going to go with him to go to prison. And that’s going to have to be his story, which is that he didn’t do anything wrong, which is absolutely ridiculous. It’s ridiculous.

So we have a Prosecution that says ‘everything he did was wrong.’ You have a defense that says ‘I did absolutely nothing wrong.’ And then, we’re left in the middle. I’m just speculating…but that’s where we’re left. I think that’s unfortunate: I’d rather hear it from him. There’s got to be some deterrent where he’s punished, he’s allowed to come clean, and lay it all out there about things that he did right and things that he did wrong. I think we could learn from it, but as it is I don’t think we can learn from it.

[to be continued…]