Children of Enron
When a limousine pulled up to take the family to the airport, Chris Boutcher couldn't quite believe it. It was the summer of 2000, Enron was trading at $90 a share, and Chris had a one-way ticket to Houston.
It sucked, sure, that he had to pick up and move halfway across the country right after his freshman year of high school in Wisconsin. He'd done the relocation thing once before, in sixth grade when his mom died. At that time, he and his younger brother Aaron had moved in with their father and stepmother, leaving behind their Indiana hometown.
"Again I was leaving my friends, and I already did that with elementary school," he says. "I wasn't a loser, I had a lot of friends, so it kinda sucked. But I'm one of those, I'm not like the real quiet type, I'm the loud, ob-nah-xious" -- his Midwestern accent projects a backslapping conviviality -- "I make friends real easy, so it wasn't really that bad for me."
And the limo sure was a nice touch. It's not every day you see that kind of thing in Burlington, Wisconsin, population 10,000. His father, Mike, had taken a job as a technical expert in power treatment devices for Enron's energy services unit making $75,000 a year. He got $25,000 as part of the relocation package.
"My dad just told me it'd be a lot better down there; we'd actually get things we'd always [wanted] -- like, we lived all right, but we didn't live real good yet," Chris says.
"I just was really excited," adds Aaron. "And my dad just telling me everything about how good of a company Enron is -- I mean, he's told me about Fortune 500 and everything. Like, I didn't read that magazine at all, but I knew it had to do with business, and I'm like, well, that must be really good."
For a family that had lived off Mike's local utility company salary before, the possibilities were tantalizing. "One of the guys that worked there, he said he worked there for ten years and now he's going to retire a millionaire," Aaron recalls.
That optimism buoyed them, even when Chris stepped off the plane into the steam room that is a Houston August. "It was, like, 97 and I was like, well, at least it's warm down here," he observes dryly. He found his new neighborhood in Clear Lake "beautiful" and loved the vibrancy of his new school, so big and diverse. Another one of the Enron perks, primo Astros seats, blew them away. They sat among movers and shakers and spotted sports legends like Warren Moon nearby.
Both boys athletes themselves, Aaron joined the basketball team and Chris played baseball. They'd never been spoiled kids, Chris cautions, not by a long shot, so when their father gave them a bunch of money to spend at the mall, it surprised them.
"When we first moved down there, he just gave us, like, $500 to go clothes-shop. It's like, wow, this is something new," says Chris. "It wasn't like just throwing money around, but I could notice that things were a lot better than before."
Along with that came a certain sense of pride in their father. They saw him working hard. In good times -- at the height of the "Roaring '90s" -- they figured he deserved it.
Chris first sensed trouble about a year after the move. He would sometimes pick his father up after work at the Park & Ride lot and drive him back to the house. He'd ask about the company, and his father would tell him the project he was working on wasn't going really well.
Neither Chris nor Aaron can pinpoint an exact date when they discovered their father had been laid off. (Mike clarifies the timeline: late November 2001.)
"I heard on the news first," says Aaron. "I don't know, my dad didn't want to tell me for some reason that Enron was going to have to start laying off or downsizing or whatever. And then I asked him about it and he told me he was getting fired."
Chris found out the family was facing eviction when he was watching Nightline one evening in mid-December. However Enron parents had hoped to deliver the bad news to their children, the highly public bankruptcy ensured that if they didn't tell them, the media would. As quickly as Enron had splashed newfound privilege on them, the Boutcher boys' fortunes reversed. Aaron had to find his own money to pay for homecoming. He put off driving lessons and got his license a year late. No more eating out, and "can't go to the mall anymore, that's for sure," Aaron says. Chris chipped in some of his paychecks from a part-time job at Subway to help make their house payment.
"Christmas was real -- that was just nerve-racking because we didn't have any money for any presents for the kids," Aaron says, referring to the younger siblings in the family. Once their plight hit the news, though, gifts from complete strangers began coming in. "I got a few things, I don't remember. They were just kind of small things -- I didn't really want anything," says Aaron. "That was the least of my worries."
Chris tried to remain positive about their situation; he knew his father was no bum and that they'd bounce back in no time at all. Aaron seemed more deflated.
"I don't know how to explain it. I was sad, I guess," he says. "I was just, like, let down that Enron would do that. I was just getting ready to know everyone and I just thought about all the friends I'd just made that I'm going to leave -- again." They considered an offer from one of Aaron's friends to stay in Houston and finish out the school year. But he needed to follow the family. They were going home.
A few days after Christmas, after the boys had a going-away party, the family headed back up to Wisconsin. Chris stayed behind a day with his father to pack up the house. This time when they left town, they didn't go by limo.
The unraveling that brought one of America's largest and supposedly strongest companies to its knees delivered a crushing blow to thousands of Houston families. Those who may have felt it the worst perhaps understood it the least -- for the children's world of economics and emotions was shaped in truly trickle-down ways.
Enron's meteoric rise to fame and fortune still lingers on the official company Web site, listing thousands of employees worldwide and billions and billions in assets. But by halting the company history and noteworthy milestones midway through 2000 -- right about the time Chris Boutcher was getting on a plane for Houston -- it omits the messy final act that made the term "Enronomics" synonymous with fiscal deception, dodgy business practices and, ultimately, colossal failure.
More than 4,000 employees were laid off in December 2001, shortly after the company filed for what was at that point the largest bankruptcy in U.S. history. Over the course of the '90s, Enron had morphed from a simple pipeline outfit to a run-and-gun megatrader dealing in water, power production and broadband. Shady bookkeeping obscured losses, and the company's real condition, from financial reports and the stock price, which made up employees' retirement plans, went into freefall, bottoming out at less than a dollar per share. Along the way, Arthur Andersen came unglued as well, when the auditing firm was found to have been shredding Enron documents during a Securities and Exchange Commission investigation.
Enron was big -- the seventh-largest company in the nation, in fact -- but it was the little things that stood tall in the minds of Enron children like Nicole Pharms. Nicole, a cheerful 17-year-old, lives with her parents in a pleasant peach house in League City. It's an older patch of suburbia near fresh-cut tract homes where the streets have faux-gentry names like Buttercup and Fresh Meadow.
Nicole's mother, Melinda, had worked for Enron since the mid-'90s. Nicole talks about the extras that Enron provided: the lavishly catered suite at the rodeo, the supercheap tickets to the symphony, the opportunity to tag along at a United Negro College Fund event that her mother organized. Nicole met Ken Lay that night and got a picture taken with him and his wife.
"I remember he had this really fancy pen, and it had, like, gold or something on it," she says. "And I was like, 'Oh, I want one of these pens,' and he's like, 'Well, one day you will have one.' You know -- 'your mom's a hard worker and I'm sure you're a hard worker' and this whole charade. And I, now I look back on it, I'm, like, I start laughing."
The high-pressure environment, though, made a serious impression on Melinda and, in turn, Nicole.
"My mom, I know, would come home sometimes so aggravated and irritated because it's really cutthroat," she says. "She would come home and be like, 'You know, I did all this work and it's still not good enough. And people come back and steal your ideas ' It hurt her feelings."
In a way, her mother's salary was, in itself, an "extra," given that her father held a full-time job at Continental that kept them afloat after the layoffs swept through. Still, many of the kids at Nicole's Clear Creek High School didn't understand things like why she had to give up her cell phone, why simplicity had replaced excess.
"Kids come to school and they have BMWs and Cadillacs and nice cars and, you know, they're not used to -- they don't know anything about simplicity," she says. "Some were like, 'Well, that's too bad, I still have my little car, my own life, and I live on the water' and all this stuff. You know, real snobby. But it didn't really affect me. I mean, it affected me a little. I think I was hurt by the fact that some people, you know, they showed they were insensitive about it."
She says her tenth-grade science teacher showed little sympathy as well.
"At school, some of the kids knew my mom worked at Enron, and my teacher -- I'll never forget this -- my biology teacher was so mean about everything," she says. "She was like, 'Well, somebody's not going to have any Christmas gifts.' She said that in front of the whole class!"
A once-proud company had been reduced to a mockery. The aggressive ambition that drove Enron has been well documented, as has the "best of the best" swagger that sometimes oozed from the executive class on down.
To be certain, Nicole had not tumbled from 90210 into Hooverville -- and she is careful to reiterate that you can turn on the news and see kids out there, even Enron kids, who were a lot worse off than she was. Still, a tale of reduced expectations and sudden fiscal sobriety does seem to resonate with Generation E as a whole: those children weaned on wealth suddenly drop-kicked into sensible spending habits.
That drop-kick left Sarah Konczakowski, now 19, and her mother, Jamey Duckworth, in pretty bad shape -- maybe as much as any white-collar wipeout. Sarah's Woodlands High School is about 60 miles up I-45 from Nicole's Clear Creek, though the two schools seem separated by little socioeconomic distance. When her single mother, whom Sarah describes as her best friend, spent months out of work, Sarah felt a renewed sense of alienation from her ritzy neighborhood.
This was tough because, for the first time, Sarah felt like they'd finally made it. She speaks softly about the rocky financial road that led up to her mother finding work at Enron.
"I was really proud, and I felt like I would fit in more with the kids in The Woodlands 'cause it's a real high-class area," she says. "I felt like I could fit in more and do a lot more things that were closer to their level." Visiting her mom at work in the downtown skyscraper -- an experience that inspired other Enron kids -- left her with a sense of grandeur and hope.
"I've never seen an office or a building like that. The elevators had TVs that played the news or the weather. And they had this dining area that you could eat any kind of food you could imagine!" she says. The Starbucks in the lobby was a particular symbol of triumph for Sarah. Only a few years earlier they had survived on her mother's Starbucks salary. Sarah repeats that her mother had always tried her best to get her clothes and things that would help her fit in, but that "I always knew where we stood in terms of our class or whatever."
When the bottom dropped out in December 2001, Sarah initially responded with a mix of anger and disappointment. "It was kind of panicky because all of a sudden we had all this and we might go to nothing again," she says. With little work to be had, her mother resorted to going on the government's temporary assistance for needy families for a period and trying to get by with food stamps and gas vouchers. A radio station donated money for a Christmas tree. Sarah started seeing a therapist and went on antidepressant medication.
"That helped a lot because I could vent about all these people who were rich and snobby," she says. It wasn't just Enron, not at all, but losing a job didn't help. She had one friend at school whose father worked for Enron, too. When he graduated, he joined the marines and has since been helping his family dig their way out of their financial hole.
"We just talked about it. He says out of everybody we know, we can relate to each other, but we can't relate to other people."
"I think it brought a lot of people together," she adds later. "We never realized how lucky we were until people started to help us."
Like Enron itself, Mindee Peterson's father appeared to be in excellent health in the early part of 2001. The stages of life, along with the years, had flown by. Her parents were past "empty nest." They had already made it "over the hill." With a good job at a great company, Bill Peterson seemed to be gliding into his golden years. His daughter felt positive about things, and she had good reason to.
"They'd go out on date nights on Friday night," says Mindee, a 29-year-old legal assistant. "Dad was working, he loved his job. Mom was staying home, she loved taking care of the house and the yard and cooking It was the American dream come true."
Unlike the others, Mindee was no longer dependent -- she hadn't been in a decade -- but she wasn't beyond enjoying nice treats from her parents. She points to the entertainment center in her apartment, the TV. The times she'd drive home from their place and find a $20 bill hidden in the console for gas.
Her father, a Lotus Notes administrator, could reel off the core values of Enron.
"Whatever it took to get the job done, that's what he was going to do," she says, remembering the 12-hour days and the 2 a.m. wake-up calls to fix the network. "He believed Enron when they said, 'These are our core values.' "
In July 2001, Bill Peterson was diagnosed with advanced-stage melanoma and went on medical leave, getting chemo treatments through the company insurance. Mindee knew from Internet research that the outcome looked bleak, but a combination of strong family support, a firm faith in God and great insurance made her believe that he had a fighting chance. Even as the media buzz grew louder about Enron's impending implosion in the fall, she tried to stay focused -- and more so, keep her father focused -- on recovery.
A few days after the company bankruptcy, as he lay on the couch with drainage tubes sticking out of his body from a recent surgery, Bill Peterson placed a phone call to Enron HR. He gave his wife and Mindee the thumbs-down. Unlike others, his 401(k) had not been decimated when Enron stock took a nosedive. (They had invested through his wife's work.) Nonetheless, his job was gone. For severance, Enron handed out $4,500.
Employees like Bill had the remaining part of December 2001 to stay with the company health care plan, among other benefits, and then transfer to continued coverage under COBRA, the federal government's Consolidated Omnibus Budget Reconciliation Act, which guarantees terminated employees their company's group insurance for a period of 18 months. The problem is that COBRA makes the laid-off employee pay the premium, plus the premium portion their employer chipped in, on top of an administrative fee.
"They knew right away they were going to have to start dumping stuff I mean, the health insurance was practically as much as the house payment," Mindee says of her parents. They canceled cell phones, Internet and satellite TV. They sold Bill's pickup truck. They put their Friendswood house of 15 years on the market. Mindee had moved in there when she was a girl.
"You just look at certain things and, you know, like a piece of tile's chipped -- yeah, that's the tile when I told Christopher -- that's my brother -- not to do this and he did that and that's what happened," she says, her purring Texas twang turning sad. "It's like, yeah, it's a blemish, but, hey, there's a story that goes with it. And the place on the counter that burned because Dad lit a candle and he didn't blow it out But that's part of the house. It's your stories. And then to think of somebody else, they don't understand the stories, all they see is a burned countertop and a chipped tile.
"That's part of my life there, too, you know, and you gotta leave it behind. But, I mean, people move every day, though, you know, and you have to trade off, and it is just stuff." She says it but seems unconvinced.
"It just all goes back in the box. Kinda like Monopoly. You know, you play this little game, buy all these things, but when the game's over, you just pack it all up, put it back in the box and put the box back on the shelf. And that's kind of like our stuff. You know? You don't ever get to keep it."
Amanda Dinh, an adorable eight-year-old Vietnamese-American, doesn't yet have all the words for how her mother's layoff affected her. She tucks her hands behind her back in a polite way when she speaks, answering in short, breathless, complete sentences. What did she love about Mommy's job? She loved going into work with her when she couldn't go to school; she loved the big building downtown and the company's summer camp that she attended.
Most of all, she loved that her mom seemed happy.
But when another company bought out Christine Dinh's online subdivision at Enron during the bankruptcy, and then that company laid her off just a few months later, Amanda and her 12-year-old brother, Christopher, noticed that Mom wasn't sleeping anymore.
"I barely got, I barely ate anything," Amanda says in almost a whisper. She was angry; she was sad; she just wasn't hungry anymore.
David Marks, author of Raising Stable Kids in an Unstable World, says these physical manifestations often indicate a burden that goes beyond words. "Especially younger kids," he says. "They're not going to come to you and say, 'Daddy, I'm worried about you being laid off.' "
He says a parent's job loss can be one of the most traumatic things a child can go through -- an ordeal amplified by how much stress they see in their parents and how much uncertainty has been thrust upon their routine.
"Younger children may in one sense feel a lot of stress because they don't understand the ramifications of the change -- they can feel the stress, they know that something is going on, they feel the instability, but they can't get a full understanding of it. And they can't really express it," he says. "If you think about divorces, how many kids feel that it was their fault that the parents got divorced? Well, this is kind of almost the same thing, especially for little kids. They don't understand that there are lots of external factors that are impinging on their lives and their parents' lives."
Enron has been called many things: audacious, invincible, ignominious and chastened. For these children of former employees, Enron stands as a wake-up call, a turning point, a moment of innocence lost.
"They're faced with the world," says Marks. "Maybe for the first time. The real world."
"In a way, I think for a while I kind of blamed Enron for Dad dying," says Mindee Peterson. "Even though that wasn't connected in any way, shape or form, but I felt like, you know, had you not laid him off, he wouldn't have been stressed out about his job, he wouldn't have been stressed out about paying for the insurance. The treatment options would've been different.
"I feel like they caused this somehow. But they didn't. Of course they didn't," she says. "That mad just kind of gets all mixed together. It's real hard to separate what exactly you're mad at And it's hurtful, you know, he was deceived by the company. He trusted them."
Bill Peterson passed away Labor Day weekend of 2002. He had moved to a small town in East Texas where family lived, along with his wife, Cathy, who would later write a book, Flashlight Walking, about the fallout of his cancer coupled with the Enron layoffs. Mindee had thought that her parents might move up there one day and grow old together after he retired. She's not the only one for whom Enron altered expectations.
She thinks back to when she was a child, when both of her grandfathers retired from the companies they had worked for their entire lives.
"I always pictured myself one day working for a company for 30 years, you know; as a child this is how I saw my future. You work somewhere for 30 years, whatever, you retire, your retirement's taken care of, everything's cool," she says. "At some level, I thought there was loyalty from the employer to the employee and it's reciprocal. And it's not. It's not."
She can feel, at times, the obsessive-compulsive tendencies creeping into her personality that could fuel a workaholic. Enron forced her to ask the question: What's the point? She says she still believes in giving her employer 100 percent.
"But that's it. You're not going to get my blood; you're not going to get my sweat; you're not going to get my tears. Nothing. I'm gonna get my paycheck and that's what I'm working for. And that's it. And I don't mean to be cold or hard, but I have a life and my job's not it."
Like other children alumni, Enron punctured her trust in work institutions -- she says she's now conditioned to be suspicious of "the guys at the top" and scrutinizes every memo for some kind of deception.
Or as Nicole Pharms says: "I definitely don't put my faith in any companies or anyone, because, you know, I would've never thought something that seems so stable -- I mean, they were doing great, but you just can't put your faith in anyone in the world." She graduated early from Clear Creek High School and attends Houston Community College in the hopes of being a fashion writer one day. She wants to make a living freelancing and avoid the big office. It's a gut reaction to the recent spate of corporate flameouts, but if her game plan is shared by others in Generation E, it just might change the nature of the work force.
Or they'll just have to suck it up and take what they can get, no longer history's unprecedented generation of privilege.
"I just think that people are starting to realize that you can't trust these company bigwigs, and I think there's going to come a time where everybody's going to realize that and there's not going to be any more big corporations," she posits. "Big or small."
Like Nicole, in the wake of corporate cynicism, Mindee Peterson says she's rediscovered something far more valuable: her priorities.
"I work to live, I don't live to work," she writes in an e-mail. "I make it a priority to invest in my friends and family, not the company I work for."
Chris Boutcher is fighting traffic somewhere outside Chicago on his way back to Burlington for the weekend. Chris is 19 now and has graduated from high school. When they arrived back in Wisconsin two and a half years ago, after the Houston fiasco, the house was freezing and they got by on milk and cereal until the moving truck arrived. But their father found a job with his old company pretty soon thereafter. And though they were down to their "last dimes," things eventually got back to normal.
Chris is driving back up to Wisconsin to find out whether he'll be shipping out this summer for Iraq. He joined the marines as a reservist and left school right around graduation. Since finishing boot camp last September and infantry school in November, he's been working for his grandmother's delivery company back in Indiana, the place that he started.
Back in Houston, meanwhile, the first court settlements have begun to trickle out in the wake of the Enron scandal, including a preliminary agreement in May for $69 million to go to employees who lost their pensions. Former bigwigs such as Andrew Fastow and Jeff Skilling also have made recent headlines, with Skilling being indicted on 35 felony counts and Fastow accepting a plea bargain in exchange for ten years of prison time. And on July 7, Ken Lay himself, the top executive to face criminal charges to date, was indicted on 11 counts of lying to employees, banks and credit agencies and conspiracy to commit fraud.
Interestingly enough, the Enron whirlwind hasn't turned the Boutcher boys off to a corporate career. Aaron wanted to work at Enron before things got bad, and it's probably the reason he wants to study business in college next year.
"That whole thing sounds cool to me, to get into business and do something like that," he says. "Just don't screw up."
Chris says much the same.
"I know that I want to work for a company that doesn't really go bankrupt, but is like Enron. 'Cause from what my dad used to tell me, it was an awesome, a really cool place to work for," he says. "I believe that it was only a few people that really screwed everyone else, so there's nothing, no real bad things I learned from Enron."
He circles back around to that idea.
"I know how some people can get when they get a lot of money, and when the money's sitting there, staring at them right in the face," he says. "They're idiots, but there's crooked people everywhere, right?"
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