Posted on Fri, Jan. 27, 2006

Ex-Enron workers sound off on defendants

ERIN McCLAM
Associated Press

Charles Prestwood, a former pipeline operator who worked three decades with Enron Corp. and its predecessor companies, still holds on to hope that he will one day recover the $1.3 million in retirement savings he lost when the energy giant imploded.

In the meantime, he wonders how long he will be able to hold on to the three acres where he lives, a half-hour outside Houston. And he examines household bills as they come in, wondering which he can afford to pay this week.

"I've sold about everything I got," the 67-year-old retiree said in a telephone interview. "I've sold a couple of my guns. I've sold my (other) property. I have to have a little extra money to subsidize Social Security."

Like many others of the thousands of people who lost jobs and large investments in the Enron accounting scandal, Prestwood will be watching closely when former CEOs Kenneth Lay and Jeffrey Skilling go on trial Monday in Houston.

Prestwood has heart rhythm problems but still hopes to attend at least one day of the trial if he can make it. He makes no secret of the outcome he is hoping for.

"I'm hoping to see justice done," he said. "Put them behind bars where they're supposed to be, that's what I think."

Some former employees like Prestwood have lived hand-to-mouth since the 2001 Enron implosion. Some were fortunate enough to have more diversified retirement plans, or young enough to rebuild what they lost. Some have published books about the scandal, and others have found new careers entirely.

As they have tried, sometimes struggled, to rebuild their lives in the four years since Enron's collapse, federal prosecutors have slowly built their case against Lay and Skilling.

It culminates in the pair's trial on charges they deceived Enron employees and investors about the company's bleak financial picture, aiming to keep its stock price and credit rating high.

Each man has pleaded not guilty, and Lay has mounted an unusual public defense, portraying himself as the victim of overzealous Enron prosecutors and insisting he was unaware that his subordinates were committing crimes.

Sherri Saunders, who was laid off from her job as an executive secretary at Enron after 24 years there and at predecessor companies, recalled the "sigh of relief" employees felt when Lay took the reins from Skilling in August 2001.

"Everyone thought, Ken's back in control," she said. "He was selling us down the river."

Saunders, 58, who lost about $1 million in retirement and has worked for four years since at a Houston hospital, says she believes Skilling is guilty. As for Lay, she said, "I don't know if they can put him in jail for stupidity."

"He was so busy being Mr. United Way, Mr. Build the Enron Field, Boys Club of America, that I just don't think he was minding the store," she said, before concluding: "I can hardly wait to see both those guys in orange," referring to prison jumpsuits.

In Henderson, Texas, a few hours outside Houston, Cathy Peterson sits at her computer each morning and checks the Internet for news of the upcoming trial. She plans to follow it closely.

She does her reading inside a 900-square-foot home that her brother-in-law bought for her a couple of years ago after Peterson's husband, Bill, a former information systems analyst at Enron, died of melanoma in 2002.

Peterson is fond of comparing Enron to the Titanic and thinks of Lay and Skilling as captains of the vessel. Even if they were ignorant of what was happening at the company, she says, they should be held responsible.

She said she believes convictions would serve as "a permanent gravestone marking the consequences of corporate greed."

Peterson has published two books, the last titled "Flashlight Walking," to tell her family's Enron story and in hopes of inspiring others dealing with tragedy. She is working on a third.

Thousands of former Enron employees are involved in class-action lawsuits seeking to recover some of their retirement savings, and hundreds of millions of dollars have been pledged in settlements. But the workers acknowledge the lawyers must be paid first, and few are optimistic they will see anything but a small fraction of their original nest eggs.

In any case, the outcome of the trial will likely have little impact on those class-action payments, said Rod Jordan, a former Enron project manager who heads a coalition of more than 1,100 former Enron workers.

"Probably the typical ex-Enroner has mixed emotions about the guilt or innocent of Lay and Skilling," he said in a telephone interview. "They just want to get the truth out."

The trial should also return a spotlight to the employee culture at Enron, once a high-flying energy corporation that ranked seventh on the Fortune 500 before the accounting scandal.

As late as the fall of 2001, just months before the bankruptcy, Lay assured employees that the company had a strong balance sheet and said he believed Enron stock was "an incredible bargain."

It is a time Brian Cruver remembers well. He started at the company nine months before it went under, working on the trading floor in - of all things - bankruptcy risk.

He said employees saw Lay as sort of "trustworthy father figure" and some employees grew overconfident, believing in the company.

"That's why everyone was, right up until it hit rock bottom, myself and others were still buying stock," he said. "Right up until the moment they told us we had 30 minutes to get out of the building." He was laid off Dec. 3, 2001.

Cruver has since helped found Giveline, which helps nonprofits and philanthropy groups set up online retail outlets - the anti-Enron, he jokes.

He sees Skilling, who was Enron president from 1997 to 2001, as more the facilitator of the fraud - and more likely guilty - than Lay, believing the latter may have been guilty of "mismanagement" but not a criminal offense.

"Should he go to jail? I don't know," Cruver said. "I think his name, his reputation, what he's been put through and will be put through for the next several years - his reputation and his career have already been ruined."

But he acknowledges other Enron employees, particularly those who had hefty savings tied up in the company, do not feel the same way.

"They're still angry," he said. "I hear from those people, and they want blood."

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