I saw this segment about an Enron employee.
COPING WITH COLLAPSE
The Jim Lehrer News Hour
December 12, 2001
pbs.org
Betty Ann Bowser reports from Houston on the
local fallout from the collapse of energy giant Enron.
JIM LEHRER: Finally tonight, more fallout
from the demise of Enron. A congressional
panel today held the first in a series of
hearings on the company, one major issue:
The treatment of Enron workers. Betty Ann
Bowser has been looking into that from
Houston, the company's headquarters.
BETTY ANN BOWSER: This time last year,
the Boutcher family was looking forward to
Christmas.
MICHAEL BOUTCHER: Mom's got your new
book.
BETTY ANN BOWSER:
Breadwinner Mike
had just taken an
exciting new job in
the risk management
department at Enron
Corporation, and moved his wife and five
kids from Burlington, Wisconsin, to
Houston, Texas.
MICHAEL BOUTCHER, Former Enron
Employee: When I came down to interview,
my boss... One of his first things were, "if
you work at Enron for ten years and you're
not a millionaire, then you're doing
something wrong because everybody is a
millionaire after ten years."
BETTY ANN BOWSER: Did you buy that?
MICHAEL BOUTCHER: Absolutely.
BETTY ANN BOWSER:
At the time, Enron was
on a roll. As the largest
trader of natural gas in
the country, with
interests in electricity
and financial services,
the company was the darling of Wall Street.
It also had a reputation for taking chances.
The Boutchers found that exciting.
MICHAEL BOUTCHER: We talked about how
risky they were, but how exciting the risk
was. You're... You're living on the edge. And
that was always the case for the year and a
half I've been at the company. The risk was
something that gave you an adrenaline rush
when you came home. You got excited
about going to work the next day.
The collapse's impact
BETTY ANN BOWSER: What the Boutchers
didn't know was that Enron's high-flying
style would bring the company to its knees
on Wall Street. For years, top brass had
painted a rosy financial picture, but a few
months ago company stock nose-dived when
executives were forced to admit there wasn't
enough money to pay the company's bills. It
was one of the fastest free-falls in the
history of Wall Street. On December 2, the
company filed for bankruptcy protection
and laid off nearly 4,000 of its 7,000
Houston employees.
Boutcher was one of the first to go. He
signed a severance agreement that
guaranteed him close to $30,000 as long as
he promised not to sue. But when the first
check came, it was $1,500 short, and he
thinks the next check due in January may
not come at all. Right now he has just a
$1,000 in the bank, and the landlord is
clamoring for rent.
MICHAEL BOUTCHER:
The $1,000... We could
give that to him, but
then we have to live on
the groceries that are in
the house, and that
won't get us through
until the alleged January payment of
severance. But you can't take the $1,000
and buy Christmas presents because you've
got to put food on the table. I mean, weekly
grocery bill's $250. So we're... We're good
probably through the end of December if we
don't buy Christmas presents and don't pay
rent. Without the job I had severance.
Without the severance and without a job,
you've... It's all about family.
BETTY ANN BOWSER: How much do the
boys understand?
MICHAEL BOUTCHER: The older ones know
that times are tough. I had a talk with Chris
and I said, "Stop asking about cars. Stop
asking about the extra things. Just need
you to keep it cool." The seven-year-olds
don't know anything. They really... They
just know that daddy doesn't work at Enron
anymore, and it's up to me and my wife to
shelter them from that.
Taking legal action
BETTY ANN BOWSER: Thousands of other
laid off Enron employees are also facing the
prospect of a grim Christmas. Last week,
they attended a three-day seminar where
they got advice on how to find new jobs and
how to cope in the meantime.
WOMAN: This is a card
for our 24-hour...
MAN: Okay.
WOMAN: ...Help line.
BETTY ANN BOWSER: Many are asking if
they should join a class-action lawsuit filed
by former Enron employees. An estimated
12,000 Enron people lost over a billion
dollars in their retirement portfolios, which
the company matched with Enron stock.
Fifty-nine year-old Tom Padgett was going to
retire from an Enron spin-off company in
February.
TOM PADGETT, Former Enron Employee:
This shows where I moved over the funds in
401(k) over to the Enron Corp. Stock.
BETTY ANN BOWSER: Now he's suing
Enron. At one point, his 401(k) was worth
over $600,000. Today all that's left is
$11,000. Like hundreds of people, Padgett
invested heavily in Enron stock, which went
from nearly $90 a share to less than 75
cents.
TOM PADGETT: We were all told that "the
company's doing great and we've made so
much money this quarter. We've made so
much profit, continue to put your money in
a 401(k). We expect the stock price to go to
$120 a share."
BETTY ANN BOWSER: This is what they said
to you?
TOM PADGETT: This is
what they kept telling
us. They expected the
stock price to go to $100
to $120 a share by
February of this year,
2001. And of course we
all know that that didn't happen. So I felt
like I would be foolish to take my money out
when I stood to gain so much.
BETTY ANN BOWSER: While people like
Padgett held onto their stock, Enron's top
executives allegedly dumped millions of
shares. Some reports say they made
between $50 million to $100 million.
MAN: They made $58 million and we got
nothing. That's disgusting.
ROBIN HARRISON, Attorney: The suit that
we filed is on behalf of the participants in
the savings plan.
Investigating Enron
BETTY ANN BOWSER: Robin Harrison,
Padgett's attorney, says Enron executives
were negligent in not telling savings plan
participants like Padgett that Enron was in
trouble.
ROBIN HARRISON: Mr.
Padgett was entitled to
know what the true
state of the company
was. For the past four
years, that has not been
the case. The
administrators of the plan, the company
and the people who oversee the company,
were responsible to inform him that, in fact,
the company was not performing the way
that it was being represented to the public.
BETTY ANN BOWSER: In October, while top
executive were still allegedly dumping their
stock, Enron froze buying and selling stock
for members of the 401 plan as it changed
administrators. The stock continued to
plunge during this period, but people like
Padgett couldn't do anything about it.
TOM PADGETT: I blame
the corporate
management of Enron. I
feel like I've been
betrayed, not only
myself, but everyone that's worked for
Enron and given their life and their heart
and their soul to the company, that
dedicated their self to Enron over the years.
I feel like everyone of us has been betrayed.
I feel like we've been robbed of our
retirement.
BETTY ANN BOWSER: Both the Labor
Department and the Securities and
Exchange Commission are investigating
alleged wrongdoing by Enron executives,
who reportedly received $55 million in
bonuses shortly before the company
declared bankruptcy. Meanwhile, Enron
executives have refused all public comment
about the company's problems.
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