A Wedding -- If Not Bliss -- for Skilling


Even while being publicly flayed by Congress and scrutinized by the Securities & Exchange Commission and the Justice Dept. as they investigate energy-trading giant Enron's collapse, former Chief Executive Jeffrey Skilling has one reason to celebrate: On Mar. 2, he and fiancee Rebecca Carter tied the knot after a nearly nine-month engagement. A spokeswoman for Skilling, 48, says the evening ceremony was at Skilling's new Houston mansion and attended by a small group of family members. It's the second marriage for both, who have four children between them. They're now honeymooning at an undisclosed location.

Carter, 42, is Enron's former corporate secretary. She has been dragged into the spotlight by virtue of her association with Skilling. A recent report in Newsweek described her as a former secretary who was nicknamed "VaVoom" by some Enron employees. It said she rose to her $600,000-a-year post while dating Skilling. In fact, as a former Andersen auditor with a Master's degree in accounting, Carter was never an Enron secretary, say former Enron executives and Skilling's lawyers. Corporate secretary is a senior position that involves arranging board business meetings and taking minutes at them.

RELATIONSHIP COUNSELING. In December, 1998, after a stint in investor relations and then as chief control officer, Carter became senior vice-president of board communications, reporting to then-CEO Kenneth Lay. She and Skilling, who divorced in 1997, began a personal relationship in 1998 after Skilling sought the O.K. of the company's board due to his concerns about the propriety of such a move, says his spokeswoman, Judy Leon.

Skilling recused himself from any discussions of Carter's compensation, and she never reported to him, adds Leon. Still, their relationship raised concerns, say insiders. When Carter was chief control officer, helping to oversee controls on Enron's trading operations, "people were afraid to tell her of problems because she would run to Jeff with them," says a former employee.

One Enron executive calls Skilling's relationship with Carter just another example of bad judgment by senior management, which also approved the controversial partnerships run by then-CFO Andrew Fastow despite the apparent conflict of interest. Those partnerships eventually helped lead to Enron's collapse into bankruptcy last year.

ROCKY ROAD. Leon dismisses rumors that Skilling might have married Carter so she can't, as a spouse, be forced to testify against him should he end up being charged with breaking any laws in the Enron collapse, which left thousands of employees without pensions and resulted in millions of dollars in losses for investors. But Carter herself may end up involved in the investigation. Her handwritten notes on some board minutes suggest that Skilling and other board members had been told of the partnerships' ability to manage profit-and-loss volatility without really transferring economic risk from Enron.

"They got engaged because they were in love with each other," insists Leon.

Still, Skilling might have to wait a long time for any happily-ever-after ending to this courtship. He made it clear in testimony before the Senate last month that although he still has most of the $66 million he received from Enron stock sales from February, 1999, to June, 2001, he expects to spend the next 5 to 10 years of his life battling some 36 separate plaintiffs' lawsuits against him. Said Skilling: "I don't know if I'll have anything at the end of that." By Wendy Zellner in Dallas


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