Today's ENRON investor.
Posted on 12/18/2001 9:46:26 PM PST by Joe Hadenuf
Ex-Enron workers look to Congress By CHRIS H. SIEROTY
WASHINGTON, Dec. 18 (UPI) -- Several retirees told a Senate hearing Tuesday how they lost most of their life savings in the collapse of Enron, while the committee announced that the bankrupt energy trader's chief executive officer would testify before it in February.
Janice Farmer, who retired last year with nearly $700,000 in Enron stock, said since the company barred her from selling Enron shares she now lives on a $63 monthly pension check from another company and is still a year away from receiving Social Security benefits.
"My life savings is gone," Farmer told the Senate Commerce Committee. "I trusted the management of Enron with my life savings. They betrayed that trust."
In the end, she said all that was left in her retirement account was $4,000.
Among the other witnesses was Charles Prestwood, of Conroe, Texas, who retired after 33 ½ years in the natural gas business, mostly with Enron, and lost nearly all of his $1.3 million in savings.
"There are people at Enron who made millions selling Enron stock while we, the rank and file, got burned. It's that simple," Prestwood said at the hearing held to investigate one of the largest company failures in U.S. history. "I am left with a tiny fraction of my $1.3 million, or about $8,000."
The 63-year-old former pipeline worker told lawmakers that it was "too late in my life to start over to build up my funds."
Kenneth Lay, Enron's embattled chief executive officer, has committed to appear before the Senate Commerce Committee on Feb. 4, said Byron Dorgan, D-N.D., who chaired Tuesday's hearing.
Lay has declined to appear before two of four congressional committees probing Enron, both times citing creditors' meetings as the reason. Besides Congress, the U.S. Securities and Exchange Commission and the Justice and Labor departments are investigating the collapse of Enron.
Dorgan said his committee would try to get Enron's former Chief Executive Officer Jeffrey Skilling, and Andrew Fastow, its former chief financial officer, to the February hearing.
Enron on Dec. 2 filed for bankruptcy after its $8.4 billion merger with rival Dynegy Inc. collapsed amid concerns about the Houston-based company's finances.
Enron's stock closed Tuesday at 50 cents a share on the New York Stock Exchange, down from its August 2000, high of $90.56.
"There are Oregonians who lost retirement security because as Enron's stock plunged like the Titanic, in effect the senior executives on the deck locked the workers in the boiler room, preventing them from selling off 401(k) shares while they dumped their own," said Ron Wyden, R-Ore.
Robert Vigil, an electrical machinist foreman at Enron's Portland General Electric unit, explained that employee retirement contributions were matched dollar-for-dollar by Enron in company stock, with limits on swapping to more diversified investments.
As the end came, many employees who had most or all of their savings in company stock, were locked out of their accounts entirely, he said.
"As the truth about Enron started to come to light -- and as the officers at the top cashed out -- we, the employees, had no choice but to ride the stock into the ground," he said.
Vigil estimated that Enron's collapse resulted in employee pension plan losses of up to $1 billion. "If my eight co-workers alone lost nearly $2.8 million that estimate is probably very low," he said.
Brutal!
And this was the Company that many were supporting and defending eight months ago.
Consider for example, a dollar for dollar match in stock by Enron: a $1 million dollar account should only be liable for a $500 K loss in Enron stock if there is no diversification at all. Only someone who put their own money in Enron would lose it all. And then they were just stupid.
I imagine that most everyone that had investments in Enron consider themselves stupid, conned, duped, or at least very unlucky.
For what it's worth Michael Savage was covering this last night and the 401K's were LOCKED into company stock and forbidden to diversify.
IF this is true the leadership of that company should be staked on an anthill with honey all over them.
I'm sure we haven't heard the last about Enron.
Today's ENRON investor.
The execs should all go to jail.
I have too many friends who have been wiped out for this to not be personal with me....
I'm thankful that I didn't accept that job offer from Enron.... it all seemed a little shady at the time. Whew!
The employees did not have to have all their funds invested in Enron stock. Nor did the lockout coincide with the start of the collapse of Enron stock. Anybody who was fully invested in Enron stock had already lost most of the value before the plan was frozen.
"In addition to regular campaign donations, Lay personally contributed $5,000 to the president’s Florida Recount Committee and $100,000 to Bush’s Inaugural Committee."
"...Karl Rove, Bush’s political guru, owned between $100,000 and $250,000 worth of Enron stock as recently as May. And former Secretary of State Jim Baker, who oversaw the Florida recount for Bush, was hired as a consultant and joint-venture partner to the firm in the early 1990s."
"...Lawrence Lindsay, the president’s chief economic advisor, served on Enron’s advisory board and reportedly received $50,000 from Enron last year, according to Waxman."
From hillnews.com
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