Who milked the most from America's biggest bankruptcies?
By Timothy Noah
Updated Tuesday, July 30, 2002, at 3:35 PM PT
On July 27, Bill Keller published an engaging New York Times column urging readers reeling from recent large-scale bankruptcies, accounting scandals, and falling stock prices to look on the bright side. Companies will now have to start behaving more responsibly, Keller argued; there will be "fuller disclosure and tighter accountability," and the culture will no longer swoon over corporate titans. Evidence to support Keller's thesis emerged today when the Financial Times Web site posted one especially valuable index of recent corporate corruption—the amount of money that top executives and directors have received during the past three years from the 25 largest companies to go bankrupt during the past 18 months. "In just three years, they grossed about $3.3 billion before their companies went bust, having wiped out hundreds of billions of dollars of shareholder value and nearly 100,000 jobs," writes the FT's Ien Cheng. Six months ago, that's a sentence you would have read in Mother Jones. Now it's a sentence you read in a conservative financial daily.
But you don't just want the aggregate figure, do you? You want rankings of who squeezed the most cash out of the biggest companies. And the FT is happy to oblige. The big winner is Gary Winnick, founder and chairman of Global Crossing, who's grossed $512 million since 1999, a period in which Global Crossing has lost $9.2 billion and eliminated 5,020 jobs. No. 2 is Lou Pai, chairman of Enron's Energy Services subsidiary, who's grossed $270 million while his company has lost $18.8 billion and eliminated 5,500 jobs. (According to the Houston Chronicle, Pai needed to get liquid in 2000 because he left his wife for a former topless dancer.) No. 3 is former Enron CEO Ken Lay, who's grossed $247 million.
Chatterbox will refrain from making any further editorial comment, because the FT's charts speak more eloquently than any Internet hack ever could.
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