Living in a House of Cards

Lay acknowledged in his Powers committee interview that cashing in more than $100 million in stock options might have suggested to Wall Street that he was ripping the parachute from the back of Enron shareholders and bailing out. Lay's attorney, Earl J. Silbert, has defended the stock sales, saying Lay needed capital to repay millions of dollars in loans he had received from the company. But according to notes from his interview, Lay never mentioned the loans to the Powers committee. Instead, Lay explained that he "wanted to liquidate some of his stock to diversify because he had approximately 75 percent of his assets in Enron stock plans."

Ceconi doubts that explanation. She figures that, based on what she saw, Enron had been technically bankrupt for almost two years, and the top brass knew it. Meanwhile, she says, Lay "was encouraging people to invest in the company and selling his own stock. He was like Jeff Skilling. No, he didn't have anything to do with when the stock would be sold. But yes, he did choose to turn the switch on in the first place to start selling shares every week."

It's safe to say that, in contrast to the mixed emotions about Lay, the contempt for Skilling and Fastow is shared by all former employees. They orchestrated a solution to the company's problems that wasn't a solution at all, says Michael L. Miller of the Severed Enron Employees Coalition. Miller is angry that Skilling only increased the pressure on a struggling company by trying to justify a higher share price through "deceit." The only honest solution, he says, would have been to admit Enron was overvalued and adjust the balance sheet accordingly.

Still, Miller isn't willing to tar everyone involved in the deception with the same brush. While he believes people such as treasurer Richard Causey and risk manager Rick Buy ignored their duties to shareholders, they may have weighed their options and decided it would all work out in the end.

"These guys became incredibly wealthy riding that train with Skilling," Miller says. "At the same time, I believe they viewed all this off-balance-sheet theatrics as a stopgap until we could get our [assets] sold and generate the five or six billion in cash that Skilling had been promising Wall Street for a couple years. I don't think they viewed them as a permanent part of the organization's structure, but as something that was necessary to get things off the balance sheet for this year-end, and by next year-end, we'll unwind them. And next year never came."

However it happened and whoever's to blame, the coalition's members seem eager to move on to the more pressing issue of securing $150 million in additional severance. According to the class action suit, the coalition's claim is based on Enron's failure to give 60 days' notice before termination, per company policy. Many employees also want bonuses owed to them for their work last year; Miller says his would be "in the six figures." As for their lost retirement savings, few coalition members hold out any hope that even a fraction of that will be recovered.

"At its peak, people probably had a lot of money in their 401(k)s, but that was based on a business model that was fraudulent," Miller reasons. "How much money would people be allowed to claim they lost?"

There is some worry among coalition members that their case will be weakened somehow as former employees move on, either to focus on new jobs or to avoid being consumed by anger and disappointment. After a lot of early interest, the employee class represented by the coalition has leveled off at about 600 people.

Still, interest could pick up if Houston's energy economy doesn't. No one knows how many of the 4,500 employees laid off are back to work somewhere else; about half the coalition members interviewed have found new jobs. A pattern of discrimination has emerged in the refusal of some firms to even interview former Enron employees, says Michael J. Miller, who put in 20 years working for the company and its predecessor.

"If you were an employer and you had a choice of equally qualified candidates, and one was from Enron and one was from Duke, which would you choose?" Miller asks.

That's a stunning turn of fate for Enron employees, who were once considered the best in their field, not just in Houston, but in energy centers around the world. Even now, many employees think it's only a matter of time before people are downloading entire libraries of movies onto their hard drives and the demand for broadband will catch up to the supply. On the other hand, the company credited with opening up the country's energy markets to private companies has done the most, through its abuse of the privilege, to damage the cause. Some states are rethinking their new laws, while others have postponed enacting theirs until the federal government concludes an investigation into alleged price manipulation in California.

In the end, the lack of an honorable legacy may prove quite motivating for former employees.

"We're all very interested in seeing that justice is done," says Michael L. Miller. "And justice means not only that what is due the people who worked at Enron is returned to them, but also that there is some accountability here. Who is to blame? And that those people pay the consequences."