Edmondson: Enron losses in Oklahoma may be more than originally thought
Saturday, February 9th 2002, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ State pension funds and agencies may have lost more than what officials originally estimated when Enron Corp. collapsed, Oklahoma Attorney General Drew Edmondson said Friday.
``We have gotten some preliminary reports that the loss may be greater ... but we do not have final estimates yet,'' Edmondson said at the Oklahoma Press Association's annual convention in Oklahoma City.
Preliminary estimates in mid-January placed the state's losses from the Enron stock plunge at nearly $7 million. Edmondson said the information still is coming in but said losses could total as much as $14 million.
In January, it was reported that the state school land trust, which benefits public schools, lost the most _ $2.75 million. The Oklahoma Public Employees Retirement System reported in January that it lost about $2 million and the Oklahoma Teachers' Retirement System said it lost about $1.6 million.
Ernest Hellwege, secretary of the Commissioners of the Land Office, or the School Land Trust, said the $2.75 million in Enron losses came over two years.
Of that, he said $2.3 million was lost when a money manager bought Enron stock Oct. 29 at about $10 a share. In late December, the stock fell to pennies a share.
Hellwege's agency manages state trust land and distributes proceeds from investments to every school district in the state. Last year, the agency sent about $59 million to schools.
Harry Rosengrant, who represents state Finance Director Tom Daxon on pension boards, said the Enron case ``touched literally every pension fund or state agency that had an investment portfolio.''
Oklahoma may try to recover the losses either through Enron-related bankruptcy proceedings, a class action lawsuit filed in Houston, or through potential individual legal proceedings against money managers who handled Enron transactions for the state agencies, Edmondson said. But it won't happen soon.
``In all likelihood, recovery from the bankruptcy court or the class-action lawsuit may well be years down the road,'' Edmondson said.
He has told the dozen agencies and boards involved not get involved in the lawsuits individually without first consulting with his office because it might expose Oklahoma to sovereign immunity questions.
He also asked agencies to provide itemized lists of any losses related to Enron since October 1998 so he can determine the scope of the state's losses.
Involved agencies include: Oklahoma Teachers Retirement System; Oklahoma Public Employees Retirement System; Oklahoma Law Enforcement Retirement System; Oklahoma Police Pension and Retirement System; Oklahoma Firefighters Pension and Retirement System; state Wildlife Department; commissioners of the Land Office; Oklahoma State Education and Employees Group Insurance Board; state Insurance Fund; Oklahoma Ordnance Works Authority; Oklahoma Housing Finance Agency; and the state Higher Education Regents.
Edmondson said his request for information from the agencies not only covers losses but also timelines on when the Enron stock was purchased.