Ex-Directors at Enron to Chip in on Settlement

[RamboLiberal]

http://www.nytimes.com/2005/01/08/business/08enron.html?ei=5094&en=06e0294b16b16a13&hp=&ex=1105160400&partner=homepage&pagewanted=print&position=

A group of 10 former directors of Enron have agreed to pay $13 million out of their own pockets as part of a $168 million settlement of a lawsuit brought by onetime shareholders who lost billions of dollars in the company's collapse in 2001.

The announcement of the agreement, reached confidentially in October, came just days after former directors of WorldCom agreed to pay $18 million of their own money as part of a $54 million settlement with former shareholders whose investments were wiped out by the 2002 bankruptcy of the company.

The Enron settlement has far broader implications for former executives who were not part of the agreement, including Kenneth L. Lay, the former chairman, and Jeffrey K. Skilling, the former chief.

With the deal, the insurance proceeds protecting Enron's former directors and officers have been depleted. Mr. Lay and other officers still have some $13 million in insurance available to pay legal fees, but they will have to pay any future judgments against them with their own money or personal insurance.

[UpInArms]

1. I hope they are stripped of every asset they have

http://www.enron.com/corp/investors/annuals/2000/board.html

ROBERT A. BELFER (1, 3)
NORMAN P. BLAKE, JR. (3, 4)
RONNIE C. CHAN (2, 3)
JOHN H. DUNCAN (1*, 4)
WENDY L. GRAMM (2, 5)
KEN L. HARRISON
ROBERT K. JAEDICKE (2*, 4)
KENNETH L. LAY (1)
CHARLES A. LEMAISTRE (1, 4*)
JOHN MENDELSOHN (2, 5)
JEROME J. MEYER (3, 5)
PAULO V. FERRAZ PEREIRA (2, 3)
FRANK SAVAGE (3, 4)
JEFFREY K. SKILLING (1)
JOHN A. URQUHART (3)
JOHN WAKEHAM (2, 5*)
HERBERT S. WINOKUR, JR. (1, 3*)

(1) Executive Committee
(2) Audit Committee
(3) Finance Committee
(4) Compensation Committee
(5) Nominating Committee
* Denotes Chairman

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3. I do too! But I'm not holding my breath. It just blows me away

to think that these cretins can stall for so long before coming to trial. We all know the fix is in and the judges are all paid off, and each jurist will be handled like a king or dead man.

[0007]

2. White collar crime is called "alleged misconduct"??

How about Embezzlement? Stealing and lying for one's own use in violation of a trust, would be more like it.

And with their team of attorneys, the best money can buy, they'll skate right around the justice system and make a mockery of all who support honesty and truth. Another one of junior's friend that was given a license to steal. I wonder if Kerik and Kenny boy did business? This country sucks!

Enron chief executives Ken Lay and Jeff Skilling. Both men are facing criminal charges for their alleged misconduct in the run up to the firm's collapse.

[UpInArms]

4. then there's that lovely "Gramm" connection

http://www.villagevoice.com/news/0203,ridgeway,31534,6.html

That's not the story presented by the D.C. watchdog Public Citizen, whose tale goes like this:

In an apparent response to a 1992 plea from Enron, Dr. Wendy Gramm, then chair of the federal Commodity Futures Trading Commission, moved to exempt the company's energy-swap operation from government oversight. By then, the Houston-based Enron was a major contributor to Senator Gramm's campaign.

A few days after she got the ball rolling on the exemption, Wendy Gramm resigned from the commission. Enron soon appointed her to its board of directors, where she served on the audit committee, which oversees the inner financial workings of the corporation. For this, the company paid her between $915,000 and $1.85 million in stocks and dividends, as much as $50,000 in annual salary, and $176,000 in attendance fees, according to a report by Public Citizen, a group that has relentlessly tracked Enron, which in turn has called the report unfair.

Meanwhile Enron had become Phil Gramm's largest corporate contributor—and according to Public Citizen, the largest across-the board donor in its industry. Between 1989 and 2001, the company tossed Gramm just under $100,000.

In 1998, Wendy Gramm cashed in her Enron stock for $276,912. There's nothing unusual about a Washington regulator quitting the government and going to work for a private company she was regulating. And people often get rich in the process. Wendy Gramm, whose office didn't return Voice calls, has told reporters she sold the stock expressly to avoid any hint of a conflict of interest.

But that's not the end of the story.

In June 2000, Senator Gramm co-sponsored the Commodity Futures Modernization Act, a measure aimed at deregulating certain kinds of futures trading, but not energy futures. That bill never made it to the floor, and thus quietly died. Six months later, on December 15, Gramm curiously turned up as co-sponsor of a bill with the same name, the Commodity Futures Modernization Act, which did deregulate energy futures and which, without undergoing the usual committee hearings and preliminary votes, was immediately attached as a rider to an 11,000-page appropriations bill. It passed and was signed into law by President Bill Clinton six days later. Few lawmakers had likely perused the rider carefully, if they even knew it was there. And at any rate, Enron had given to the campaigns of over 200 legislators.

...much more...

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5. It is beyond my comprehension and intelligence to think that

the Gramm's are walking around as free as the birds. Wendy, even said she knew where the missing money was, after Enron went down. The only penalty, was that Texas A&M refused Phil Gramm as being the head administrator, President I think. How can they walk the streets when everyone knows that they are nothing but thief's?

I must live in a delusional world. The Gramm's are revered and respected in high society and it's circles. How could anyone like or enjoy enthusiastically, the Gramm's?

[UpInArms]

6. here's a great biography of Gramm

http://www.famoustexans.com/philgramm.htm

excerpt:

During that 1984 campaign, the Federal Election Commission (FEC) began investigating Gramm's campaign finances. He had paid Jerry Stiles, a Texas builder, $63,000 to complete his waterfront house in rural Maryland. The builder also ran three troubled savings and loans. The cost of the work he did on the house was $117,000. FBI agents who later investigated Stiles on S&L-related charges found this discrepancy suspicious. Gramm was involved with the owners of at least three Texas S&Ls that later failed at a cost to taxpayers estimated at $160 million, and had previously contacted federal regulators on behalf of Stiles and his savings and loan.

When the Gramm learned of the probe, he quickly sent the builder $50,000 to cover the difference, then took back the check when the Senate Ethics Committee noticed. Gramm, who later advocated full disclosure of embarrassing records by President Clinton, sued the FEC and waged a costly fight to seal his own records. In 1987, the Senator was fined $30,000, one of the largest ever handed down by the FEC. Stiles' corrupt S&L deals collapsed in 1989, costing taxpayers an estimated $200 million. Stiles was sentenced in Texas to 55-years on 11 counts of conspiracy and fraud. The investigation originally began as the result of a complaint filed by Donna Mobley of Austin, a crusader for economic justice, civil liberties and good government who met an untimely death ten years later.

In 1985, Gramm was linked to a campaign contribution shakedown run out of a Small Business Administration (SBA) office in El Paso. He was never subjected to a complete investigation or negative press coverage, however, because on February 19, 1988, a leased Rockwell Aero Commander 680 crashed and exploded shortly after taking off from El Paso International Airport. All aboard, the pilot, his wife and son, were killed. The pilot was local businessman Don McCoy who, a day earlier, had agreed to give testimony in an FBI investigation that had threatened both Senator Gramm's protégé at the SBA, and some of the city's most prominent business leaders.

Gramm was re-elected in 1990 with the highest vote percentage of any Senate candidate in a Texas general election in over three decades.

Gramm's legislative record includes such bills as the Gramm-Latta Budgets and the Gramm-Rudman Act. Gramm-Latta mandated the Reagan tax cut. Gramm-Rudman placed the first supposedly binding constraints on Federal spending. Gramm was chairman of the National Republican Senatorial Committee during the return of a Republican majority in the Senate in 1994. With that majority in place, Gramm, as chairman of the Banking Committee, led passage of the Gramm-Leach Act, making changes in the banking, insurance and securities laws which Congress had kept at bay for sixty years.

...much more at link...

[0007]

7. 'Tis amazing how plane crashes has saved so many Republican

careers.