In the late 1990s, Enron’s financial future received a fatal blow when the Federal Energy Regulatory Commission ( FERC) brought back price controls. Lay and other upper management personnel began dumping Enron stock. Between 1999 and July 2001, Lay began selling Enron shares which ranged between $31 to $86. Lay eventually accumulated $101.3 million for himself. Jim Derrick, general counsel, sold 160,000 shares between June 6 and June 15, 2001. Former CEO Jeffrey Skilling had sold 500,000 shares as of September 17, 2001. A few weeks later, on December 2, their company filed for bankruptcy. (The Village Voice, January 16, 2002)

In the late 1990s, Enron’s financial future received a fatal blow when the Federal Energy Regulatory Commission ( FERC) brought back price controls. Lay and other upper management personnel began dumping Enron stock. Between 1999 and July 2001, Lay began selling Enron shares which ranged between $31 to $86. Lay eventually accumulated $101.3 million for himself. Jim Derrick, general counsel, sold 160,000 shares between June 6 and June 15, 2001. Former CEO Jeffrey Skilling had sold 500,000 shares as of September 17, 2001. A few weeks later, on December 2, their company filed for bankruptcy. (The Village Voice, January 16, 2002)

Enron executives lived a life of perks and privilege, and they knew it. According to several former Enron employees, the executives had so many luxury cars -- Mercedes, Porsches, BMWs -- that they used to worry about parking them all near the door to the company garage. They did not fear that their vehicles might be stole, but thy feared that their $50,000-a-year employees might get the wrong message when they went to retrieve their Toyotas and Fords. (Washington Post, February 24, 2002)

Most Enron employees could never have afforded to travel on the ski weekends to Beaver Creek, Colorado. They did not fly in one of the company's corporate jets. There was a fleet of them stored in a private hangar at Bush Intercontinental Airport. Enron was definitely a two-tier society. (Washington Post, February 24, 2002)

The Skillings resided in a mammoth Mediterranean-style home with a tile roof. He was engaged to Rebecca Carter (the one known as Va Voom), who under Skilling was promoted to executive secretary to Enron's board of directors at a salary of $600,000.

Fastow built a Tudor-type mansion. Kopper and his partner William Dodson opted for a postmodern home near that of the Lays.

Lay -- who also divorced his first wife and is married to his former secretary -- spent his money in Aspen, where he bought three homes and one lot. He also purchased several properties in Houston. He also maintained a $7.1 million apartment in the Huntingdon – Houston’s finest apartment building . (Washington Post, February 24, 2002)

Pai picked up 77,500 acres (along with some partners) in southern Colorado -- land that former shareholders and employees are trying to attach in their lawsuits. He also bought a ranch in suburban Houston for his second wife, Melanie Fewell Pai. He bought her a breeding and training operation for top-quality horses.

Then came the collapse of Enron Some of the executives rushed to sell their properties. Lay sold two of the four properties. An Aspen, Colorado home went for $10 million, which worked out to an Aspen real estate record $3,330 per square foot. (Washington Post, February 24, 2002)

On January 23, Lay resigned as chairman and chief executive of Enron. His resignation, on the eve of two congressional hearings, had been sought by a committee of major creditors who hold veto power over Enron’s Chapter 11 bankruptcy reorganization efforts.

By stepping down, Lay could get a severance package worth between $25 million and $51 million that included a lifetime annual pension of nearly $475,000, a $12-million life insurance policy, and payment of taxes on any severance pay. But that possibility was clouded by the Chapter 11 bankruptcy filing. Lay’s severance was based on payments he received in 2000, multiplied by the three full calendar years left on his contract. That meant Lay would be entitled to a lump sum of about $25 million, or three times his 2000 salary of $1.3 million and bonus of $7 million. (Los Angeles Times, January 25, 2002)

That $25-million tab would be further increased by an unspecified “long-term grant value” received in 2000, according to the proxy statement. That could include the $7.5 million of restricted stock and a $1.2-million cash payment that Lay also received in 2000, which Enron called “long-term compensation.” If that assessment was correct, the total payout would be $51 million. The SEC filing also said that Lay was entitled to a lifetime pension that would have been valued at $475,042 if Lay had stayed with Enron six more years until age 65. In addition, the company said it would pay all taxes on Lay’s severance if the IRS rules that the severance package was an “excess parachute payment.” (Los Angeles Times, January 25, 2002)

In addition, just before resigning as Enron’s chief, Lay held a $12-million life insurance policy that Enron helped him buy, according to his 1996 employment agreement, also filed with the SEC. Lay also remained as an Enron director, and they were paid at least $50,000 a year. (Los Angeles Times, January 25, 2002)

In 2000, Enron provided Lay with an unusual line of credit of as much as $7.5 million that he used repeatedly, often to help cover soured investments he made elsewhere, his lawyer had said. He received more than $200 million in compensation from Enron between 1999 and 2001. The collateral to secure the line of credit apparently was Lay’s own Enron stock, shares of which he had received from stock options that were part of his compensation package during Enron’s explosive growth in the late 1990s.

Besides his salary and bonuses, Lay realized $43.8 million from stock options that he cashed in during 1999, and $123.4 million from exercising options in 2000, according to Enron’s government filings. Lay sometimes borrowed from his Enron line of credit last year when he expected to face margin calls from other lenders.

Before declaring bankruptcy, Enron paid out $744 million in salary, bonus, and stock grants to the company’s 140 senior officers -- an average of $5.3 million each. The payoff also included $100 million in retention bonuses to about 300 workers. The sums collected by top Enron insiders provide a stark contrast with the modest severance payments to the 4,200 Enron employees who lost their jobs around the time of the bankruptcy filing. Other payments included went for such expenses as soft drinks, burritos, limousines, party tents, and silk flowers. But there also was $37,933.70 to Accountemps, $100,000 each to the Republican and Democratic senatorial committees, and $90,000 to the lobbying group Americans for Tax Reform. (Los Angeles Times, June 18, 2002)

Lay collected $103.6 million in total payments last year, including salary of $1.07 million, a bonus of $7 million, long-term incentives of $3.6 million, and $81.5 million in loan advances. Lay also was awarded stock options and restricted stock worth $49.1 million. (Los Angeles Times, June 18, 2002)

Payouts in 2001 included the following:

**Skilling received $8.7 million in salary, bonus and other compensation, plus stock and options grants of $26 million.

**Fastow collected $2.4 million in salary, bonus, and other pay, plus $1.8 million in stock-related compensation. The figures did not include the reported $40 million more that he received through his interest in controversial limited partnerships that Enron used to boost profits and conceal corporate debt.

**Richard B. Buy, former chief risk officer, received $2.4 million in salary and bonus and $3.4 million in stock compensation.

**Richard A. Causey, former chief accounting officer, was paid $1.9 million in salary and bonus plus $2.5 million in stock awards. (Los Angeles Times, June 18, 2002)

THE BAXTER SUICIDE. On January 25, 2002, J. Clifford Baxter committed suicide in the affluent Houston suburb of Sugar Land.

The 43-year old Baxter joined Enron in 1991 and was chairman and CEO of Enron North America prior to being named chief strategy officer for the corporate giant in June 2000 and vice chairman in October 2000. Less than a year later -- in May 2001 -- Baxter resigned when the company showed signs of a weakening internal infrastructure. He reportedly challenged the company’s questionable financial practices and resigned in May 2001. Before Enron’s collapse became public, Baxter sold 577,436 shares for $35.2 million. (Los Angeles Times, January 26, 2002)

In August 2001, Baxter was identified by Enron executive Sherron Watkins in a letter to Lay concerning the company’s floundering financial status. Watkins wrote that “Cliff Baxter complained mightily to (then-CEO Jeff) Skilling and all who would listen about the inappropriateness of our transactions with LJM.” LJM was one of the partnerships that kept hundreds of millions of dollars in debt off Enron’s books. Watkins identified Baxter in a section of her letter stating there was “a veil of secrecy around LJM and Raptor,” another entity involved in the partnerships. Watkins’ letter to Lay stated that “we will implode in a wave of accounting scandals” unless the company changed its ways. (Los Angeles Times, January 26, 2002)

JEFFREY SKILLING – HIS DEMEANOR. As the congressional investigation of Enron was going on in early 2002, Skilling’s pompous behavior was clearly demonstrated. He said that he could not have overseen everything at the company and accused lawmakers who had challenged his testimony of “acting as judge and jury” in an election year. When commenting on the congressional investigations, Skilling said, “The United States Congress has decided that I am guilty until proven innocent.” (Washington Post, March 2, 2002)

In a television interview aired on “Larry King Live,” Skilling said that no one should have expected that a top executive would have known everything or been the one to “close out the cash drawers” as Enron began to collapse. “We made the right decisions.” Enron had “one of the best control systems in the world. … It used to be kind of a joke in Enron that you couldn’t go to the men’s room without the accountants and the lawyers going in with you. … Can those controls catch everything? Of course not. Does a CEO of McDonald’s … go and close out the cash drawers of every store every night? … You rely on the people within the company.” (Washington Post, March 2, 2002)