Enron employee, retirees recount loss of life savings as company collapsed
Tuesday, December 18th 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ An employee and retirees of collapsed Enron Corp. told a Senate hearing Tuesday that their life savings were wiped out as the company's stock price plunged and the company barred them from selling Enron shares from retirement accounts.
The employees disputed Enron officials' assertion that they were locked out of their accounts for 10 business days this fall, saying it was much longer _ increasing their losses.
``This is a tragedy for many, including the workers and investors who ... have been cheated out of billions of dollars,'' said Sen. Byron Dorgan, D-N.D., chairman of the Senate Commerce subcommittee on consumer affairs.
Among the witnesses: Charles Prestwood, who retired after 33 1/2 years in the natural gas business, mostly with Enron, and lost nearly all his $1.3 million in savings; Janice Farmer, a retiree who had nearly $700,000 in Enron stock and now faces living on a $63 monthly Social Security check.
``We have been lied to and we have been cheated,'' Farmer declared at the hearing, held to examine one of the biggest corporate failures ever.
With the energy-trading company's stock having hemorrhaged more than $60 billion in value in recent months, Dorgan said, ``Some at the top of the pyramid got rich and many at the bottom lost everything. It appears to me to be a combination of incompetence, greed, rampant speculation with investors' money and perhaps some criminal behavior.''
Sen. Barbara Boxer, D-Calif., was more blunt, telling reporters: ``I personally hope some of these people wind up in jail.''
The Justice Department is investigating Houston-based Enron for possible criminal conduct. The Labor Department and the Securities and Exchange Commission are conducting civil investigations.
While ordinary employees were prohibited from selling company stock from their Enron-heavy 401(k) accounts, Enron executives cashed out more than $1 billion in stock when it was near its peak, lawmakers say.
And nearly 600 employees deemed critical to Enron's operations received more than $100 million in bonuses last month as the company faced a merger that unraveled and then went into bankruptcy.
Worth more than $80 a year ago, Enron's stock has tumbled to less than a dollar a share.
In addition to retirees and some 4,500 out-of-work employees, countless investors around the country have been burned by Enron's rapid descent into federal bankruptcy court in recent weeks.
Enron, which was the nation's seventh-biggest company in revenue and admired by Wall Street as a technological innovator, has acknowledged it overstated profits for four years.
The chief executive of its longtime auditor, Arthur Andersen LLP, told a House hearing last week that the accounting firm notified Enron's audit committee on Nov. 2 of ``possible illegal acts within the company.''
For the second time in less than a week, no Enron officials were present at a congressional hearing to defend the company's actions. Chairman and CEO Kenneth Lay declined an invitation to testify but told the Senate panel he would attend a future hearing. He is a friend of President Bush and a big campaign contributor.