Posted on 08/29/2002 4:46:57 AM PDT by Libloather
Times Are Tough for Former Enron Bosses
Wed Aug 28, 4:53 PM ET
By Jeff Franks
HOUSTON (Reuters) - For former Enron Corp. executives who were once corporate celebrities and Wall Street darlings, these are tough times.
Instead of competing for space on the society pages and accepting invitations to the best parties, they now live mostly in the shadows -- pariahs hidden from public view, not the prophets many once proclaimed them.
Just as their now-bankrupt company is in tatters, so are the lives and reputations of former Enron bosses Kenneth Lay and Jeffrey Skilling and their top money man, Andrew Fastow.
They have disappeared from civic organizations and corporate boards, are shunned by political candidates and charitable causes, and are the objects of curiosity when they make a rare public appearance.
Instead of guiding an industry leader with $100 billion in revenue, they spend their days meeting with lawyers, locked in a passel of legal fights to keep their fortunes. They have few friends, no clout, and zero sympathy.
"I haven't heard one person say they feel sorry for them. Everyone says 'These guys destroyed the company. They're all a bunch of greedy pigs,"' said securities law expert Thomas Ajamie.
Prosecutors have said the three men are under scrutiny in the government's wide-ranging Enron investigation, but so far they have not been indicted. Numerous shareholder lawsuits accuse them of misdeeds including insider trading and corporate malfeasance, but they have denied any wrongdoing.
Each is said to be coping with the fall from grace in his own way, but a lawyer for one of them said it has been difficult.
"These are rough times for all of them. They are understandably upset about what has happened," the attorney said.
LAYING LOW
Last week, Fastow's former right-hand man, Michael Kopper, gave a glimpse into the life of an alleged corporate rogue when he pleaded guilty in open court to bilking Enron of millions of dollars in shady special partnerships he and Fastow set up.
When U.S. District Judge Ewing Werlein asked him if he had a clear mind and knew what he was doing, a nervous Kopper said he did, but admitted that he had been in psychotherapy the past year.
Why, the judge wanted to know.
"Stress-related anxiety," Kopper replied. He said he was taking medications that included pills to help him sleep.
For Lay, Skilling, and Fastow, coping has taken the public form of laying very low.
Former Enron chairman Lay and his wife Linda were once mainstays on the Houston social circuit, but have made only a few appearances since the Enron scandal broke last fall. When they show up, Lay, the affable former preacher's son, works the room as he always did, assuring all that everything is fine.
Lawyers close to the case say he believes he will be cleared of any misdeeds and his good name restored.
Lay surprised local journalists by attending a recent function for a new newspaper editor, and shocked some when he reportedly told the editor: "Don't believe everything you read in the newspaper."
Former CEO Skilling is said to spend most of his time behind the gates of his multimillion-dollar mansion, brooding about what has happened and what the future may hold. He is spotted occasionally at bars and restaurants near his home, having drinks and holding forth on Enron.
NO CRIME COMMITTED
"He definitely understands there is a strong risk of indictment," his brother Mark told the Houston Chronicle. "He thinks he has committed no crime but he understands in the political climate that exists now anything is possible."
Skilling is not talking to the press, but wrote a bitter rebuttal to the newspaper.
"I did not and do not expect to be indicted. I committed no crime while I was at Enron and no one told me they were committing a crime," he wrote.
"I believe in the American criminal justice system. The only thing that undermines my belief in any of our institutions is the way that some, in this case the Houston Chronicle, are simply willing to make up or twist the facts," Skilling said.
Fastow, the former CFO, has become all but invisible, a wraith locked behind the shuttered windows of his two-story home in an upscale Houston neighborhood.
Spokesman Gordon Andrew has said he is spending much time with his wife and two young sons, trying to make life as normal as possible while he and his lawyers tangle with the Feds.
People close to the case believe Fastow is negotiating a plea bargain with prosecutors, but that he may still face a long prison sentence because he was at the center of the financial scandal that drove Enron into bankruptcy last year.
Fastow, a hard-driving 40-year-old who Wall Street once pronounced a financial wizard, has not spoken publicly since he resigned in disgrace last fall.
But for months, a large U.S. flag has been draped across the front of his home, as if to declare his faith in all things American -- the system, capitalism, justice.
Recently, a child's toy, a little pedal car, sat on the front porch below the flag, a silent reminder that in the demise of Enron adults are not the only ones paying a price.
And it all happened during the *Crinton administration...
There are always crooks and folks trying to manipulate company assets for their own benefits. Hopefully a good company or a "large company" has checks and balances in place to prevent such actions. A large company, traded on a major stock exchange and regulated by the SEC, should have sufficient internal checks and balances to prevent such corrupt practices. An additional level of protection should be the independent auditor.
It is hard for me to believe that there was such obvious cooking the books going on (or wishfull financial accounting of earnings and expenses) at En-Wrong, Global Crossing, WorldCom, Qwest, Sunbeam, etc. With such creative accounting, lack of internal checks and balances, lack of Board of Director oversight, lack of SEC oversight, lack of FERC or FCC oversight, lack of state regulatory agency oversight, lack of institutional investment analyst problem identification, or lack of credit rating agency blowing the whistle earlier.
There were so many companies and so many who were asleep at the switch is what if find disturbing. Yes, the Clinton legacy was all about "not getting caught and when caught stonewalling the truth."
How does this differ from Rubin types, taking peoples money AS AN INVESTMENT, with the expected return and NOT AS A CONTRIBUTION, and they get to walk free! Something has really changed in our world during the last 12 years.
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