Ex-Employees Fight for Shreds of Enron Pensions
MELISSA BLOCK, host:
This is ALL THINGS CONSIDERED. I'm Melissa Block.
With Enron's Kenneth Lay and Jeffrey Skilling now found guilty and facing long prison terms, we thought we'd look back today at the wide-ranging effects of the Enron scandal. The company's sudden collapse in the winter of 2001 set in motion a raft of investigations and lawsuits.
The Justice Department's Enron task force brought criminal charges against 33 people. Sixteen pleaded guilty. Seven have now been convicted. While prosecutors scored a huge victory yesterday, there have been setbacks for the government, most notably the conviction of accounting firm Arthur Andersen was overturned by the Supreme Court.
We'll begin our coverage with NPR's Wade Goodwyn in Houston, who's been talking with former Enron employees.
WADE GOODWYN, reporting:
Enron's bankruptcy was the catalyst for hundreds of tragedies, both big and small. The worst was Cliff Baxter. He'd been one of Enron's top executives and CEO Jeff Skilling's closest friend. Baxter had warned Skilling repeatedly that the off balance sheet transactions were wrong, that Enron's accounting was dangerous. He shot himself on the side of a Houston highway, unable to face the possible federal indictment and most of all, knowledge that he was likely to be called to testify against his friends and former colleagues. No Enron family suffered a more devastating loss than his wife and two children.
But other Enron employees and their families have suffered ruinous financial losses. $2.1 billion in employee retirement went up in smoke. It was easy to be fooled into pouring your retirement into Enron stock. Enron was a company that oozed money and success. Why not invest all or most of your retirement in Enron stock? That's what the smart money was doing. The image of stunned, angry employees sitting on the sidewalk in front of the crooked E logo, cardboard boxes at their feet and heads in their hands, is one of the lasting legacies of Enron.
The employees join the long line of Enron creditors waiting to get some part of what they're owed. Nearly $8 billion in settlements are in various stages of approval, but it's impossible to calculate what the reimbursement percentage is going to be. For the older employees, they live their golden years as best they can, hoping the wheels of justice will turn faster. The vast majority of the younger employees have by now found other work. Some found new jobs in Houston, others moved away.
Every one of them poorer and wiser for their Enron experience.
Just a few hours before Enron declared bankruptcy, Chairman and CEO Ken Lay took the last $1 million out of a special loan account the company had set up for him. He used that $1 million to pay off his mansion. Two days later, the employees each got one last check for $4,600. The jury said yesterday that Ken Lay's crass act, drawing down that last $1 million, defined for them his bad intent. It strengthened their resolve to punish him for what he'd done. For Enron's employees, that will have to do for now.
Wade Goodwyn, NPR News, Houston.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.