The man who knew too much
Independent co.uk
Clifford Baxter was found dead with a gun in his car. He
was a man under pressure. Like other directors, he sold
shares as the firm's losses were hidden. He had
documents; investigators wanted to speak to him. He
was talking of hiring a bodyguard.
David Randall
27 January 2002
Palm Royale Boulevard is not the
kind of street where you expect
to see fancy sedans parked up
at two in the morning.
The tree-lined road runs through
Sugar Land, one of Houston's
snazzier suburbs. Everyone has
off-street parking here, especially
if they own a brand-new Mercedes like the one the patrolling
officer could see by the kerb with its lights out. As he got
closer he could make out a figure in the driver's seat. He tried
the door, but it was locked. It was only when he broke the
window that he discovered the body of J Clifford Baxter,
graduate of Columbia Business School, former Enron
executive, and now the very recently dead repository of
knowledge about what really happened in the biggest
corporate scandal in history.
He had been shot in the head. Once. Beside him lay a gun
and a note. We now know the gun was a .38 calibre revolver.
What we don't yet know is precisely what the note said, but
ABC television, quoting sources close to the investigation into
this apparent suicide, say it referred to Enron and the
pressures that were piling up on this happily married,
43-year-old father of two and which built up in his mind until
the one way he could see out of it all was to put a bullet in his
head.
And the pressures were considerable. The company he used
to work for had become the biggest ever corporate
bankruptcy, and revelations were coming daily about how its
directors, Baxter among them, had hidden losses offshore
while selling shares for hundreds of millions of pounds. When
the share price collapsed, the staff's pensions were practically
worthless. There was politics, too. Enron threw money at
politicians like confetti at a wedding. Baxter, concerned about
all this, had spoken out in the Enron offices, and then left the
firm suddenly last May. And congressional investigations were
under way. Officials wanted to speak to Baxter and see
documents still in his possession. He knew an awful lot.
That is why, according to colleagues, he was worried. He had
briefed lawyers, and, according to Jerry V Mutchlen, president
of the charity Junior Achievement of Texas, where Baxter sat
on the board, "was depressed and disappointed about all that
had happened". Another former business associate went
further. Baxter, he said, broke down in tears during a phone
call two days ago. He was even, the businessman added,
"talking about perhaps needing a bodyguard". After all, he
knew a lot. Maybe more than anyone imagined. Until Enron
imploded in the autumn, Clifford Baxter seemed to be a man
who had it made; more than £20m made, in fact, from selling
Enron shares alone. He lived with his wife, Carol L Whalen, in
a half-a-million-dollar colonial-style home in Sweetwater, much
the toniest part of Sugar Land, had a son of 16 and an
11-year-old daughter, and was wealthy enough to fund a
charitable foundation named after him and his wife. It gave to
causes such as a local Catholic church and the Republican
Party. He also had a 72-ft yacht, Tranquility Base, on which
he had spent much time since leaving Enron. He seemed,
according to Ross Tuckwiller, general manager of the Houston
Yacht Club, happy there. But he also knew a lot. Maybe that
was why, according to friends, he was planning to buy a faster
boat and use it to travel.
It must have all seemed a far cry from the day in 1991 when
the Columbia MBA (top of the class of '87), then aged 32,
joined a small energy company called Enron. As it grew into
one of the largest corporations in America, Baxter rose
quickly, becoming chairman and chief executive of Enron
North America before being named chief strategy officer for
Enron Corporation in June 2000 and then vice-president the
following October. He was an aggressive and sometimes
successful deal-maker, but he also led the acquisitions that
became two of Enron's costliest errors: the purchases of
Portland General Electric and Wessex Water. According to
colleagues, he worked hard and played hard, taking his family
to Disney World every year. Enron president Jeff Skilling said
he was well liked for "his sense of humour and straightforward
manner". Skilling was an expert on Baxter's straight-talking.
After all, according to a memo sent to Kenneth Lay, the
company boss and buddy of President Bush, by Enron
whistleblower Sherron Watkins, Baxter "complained mightily
to Skilling and all who would listen about the
inappropriateness of our transactions". She knew that he
knew a lot.
By the time Watkins wrote this memo Baxter was three
months into his post-executive role with Enron. But although it
was now his yacht and family that saw most of him, he had
not left Enron completely. Contrary to initial reports, Baxter
had been retained as a consultant and his Enron pass was
found on his body on Friday. His death was relayed to Enron
employees in a four-line email that made no mention of
suicide.
His lawyers were also informed. On the morning of his death
they had been negotiating with congressional officials over
their request to speak to Baxter, see his documents and,
possibly, have him formally give evidence to the hearings now
under way. Representative James C Greenwood,
Pennsylvania Republican and chairman of the House Energy
and Commerce Committee, said on Friday: "It seemed to us
that he was a pretty highly placed insider at Enron who had
understood exactly what was wrong there." A lot of people,
you see, knew that he knew a lot.
But we won't know what he knew now. Along with the
documents shredded by the auditors from Andersen, the
testimony of J Clifford Baxter will remain one of the untold
mysteries of the Enron affair, however far into the recesses of
George W Bush's administration and corporate America it
eventually reaches.
But Baxter's documents may yet speak for him, and the FBI
is now investigating his death. The real smoking gun on the
seat of the Mercedes parked on Palm Royale Boulevard may
yet prove to be Baxter himself. After all, he knew an awful lot.
The Wakeham link
The Tory who may have to talk
As the Tory minister who presided over the privatisation of the
electricity industry in the Eighties, Lord Wakeham was an
obvious choice as a director of Enron.
He has been far removed from Houston as the scandal has
unfolded, but may yet have to break his silence on the case
and, as a shareholder and board member, give evidence to a
US Senate committee.
There is a particular desire to hear what he may say as a
member of Enron's audit and compliance committee, whose
role was to see that proper procedures were in place,
including legal advice and auditing. The committee relied upon
expert advice, but its role in the affair has yet to be fully
explored.
Lord Wakeham was the political fixer of the Thatcher years
whose wily acumen earned him a cabinet post as secretary of
state for energy.
Like many top politicians, Lord Wakeham of Maldon in the
County of Essex - as John Wakeham became in 1992 - used
his contacts and the expertise acquired in office to secure a
very full retirement.
After leaving front-line politics in 1994, the man responsible for
co-ordinating the presentation of government policies in John
Major's fledging years as PM quit spinning to become the
£156,000-a-year chairman of the Press Complaints
Commission. His time at the PCC, concurrent with the death
of Diana, Princess of Wales and the schooling of her two
sons, gave Lord Wakeham, now 69, a higher public profile.
The clubbable peer, a member of the Garrick, the Carlton,
Buck's, St Stephen's Constitutional and the Royal Yacht
Squadron (Cowes), was chairman of the Royal Commission
on Reform of the House of Lords and sits on the boards of no
fewer than 19 companies. He is non-executive chairman of
Vosper-Thorneycroft, Genner Holdings and Kalon, and a
director of Bristol & West and N M Rothschild, to name a few.
Jo Dillon
independent.co.uk |
