HOUSTON — Former Enron employee George Maddox, who lost his retirement savings when the energy giant collapsed, says he has been forced to spend his golden years making ends meet by mowing pastures and living in a run-down eastern Texas farmhouse.
Maddox, who served 30 years as a plant manager with the company, was long retired as Enron began spiraling out of control in the months leading up to its bankruptcy Dec. 2, 2001. With all his retirement savings tied up in 14,000 shares of company stock, then worth more than $1.3 million, Maddox says he never saw the crash coming.
“There was no way I thought it would go belly up,” said Maddox, 78.
Ten years after what was the biggest bankruptcy in U.S. history at the time, Maddox and other former workers of the Houston-based company remain angry about the scheming and deceit that led to its spectacular downfall. But most have tried to move on as best they can.
Eric Eden, who ran Enron’s computer drafting department, started a company to manufacture his invention — an underground lawn sprinkler he eventually sold nationwide.
Deborah DeFforge, who worked in Enron’s energy retail arm for five years, started a new career as a real-estate agent. She said she’s enjoying it, though she acknowledges her former company’s collapse stung for a while.
“But it’s not like something we just sit and cry over every day,” DeFforge said. “It is what it is.”
Once the nation’s seventh-largest company, Enron plunged into bankruptcy proceedings after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable. The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.
Several top executives, including ex- chief executive Jeff Skilling, landed in prison for their roles in a scheme to manipulate the company’s earnings and stock price by lying to employees and investors about Enron’s financial health. They were accused of using accounting tricks and complex financial structures to hide losses and create an illusion of success.
Lingering anger
Some former employees say that beyond the loss of their jobs and retirement savings, they’re upset that many people still think the vast majority of Enron workers were part of the greed and dishonesty that brought down the company. They lament that the innovation and generosity that once made it a great place to work are now long forgotten.
“Enron wasn’t evil. … A few individuals were corrupt, but not the entire company,” said Karen Hunter, who lost her job in Enron’s international marketing section and eventually found new work in marketing.
Maddox’s anger is directed particularly at three of the 24 Enron executives who were convicted in the scandal: Skilling; founder Ken Lay; and Andrew Fastow, the ex-chief financial officer and architect behind financial schemes that doomed the company.
Skilling remains in prison awaiting resentencing after an appeals court overturned his 24-year sentence and the U.S. Supreme Court declined to overturn his convictions. Lay’s convictions were vacated after he died of heart disease following his 2006 trial.
Fastow is serving the remainder of a six-year prison term in home confinement in Houston and is set to be released Dec. 17. He is now working as a document-review clerk for the Houston law firm that represented him in civil cases over the past decade.
“I can’t hate them, for sure. I believe in forgiveness, but I’m still mad at them,” Maddox said.
Working after the collapse
After his Enron retirement became worthless, Maddox and his wife, Phyllis, had to lease their suburban Houston home and move to an old family farmhouse in the eastern Texas town of Van. They also went back to work. Phyllis Maddox, a retired teacher, became a substitute teacher while her husband mowed lawns and pastures.
Phyllis Maddox later developed liver cancer and died in 2008. George Maddox used $26,000 he received from a lawsuit he and other ex-workers were a part of to get back some of their retirement savings to pay his wife’s medical bills. Now he raises his 14-year-old grandson by himself.
Lisa Feener worked as a manager of marketing services from 1989 until being laid off just before the bankruptcy. She still has some fond memories of the company, which she said treated its employees fairly and gave back to the community. Feener has saved a collection of Enron memorabilia, including small plaques and awards marking the completion of projects and photo albums depicting happier times.
“Every single person, even the people who we don’t think have paid enough, have paid,” said Feener, of suburban Houston, who returned to Enron from 2002 through 2007, helping to sell the company’s assets.
She has done freelance marketing work the past few years.
While Hunter and Feener, 46, place blame on either Fastow or Skilling, they believe Lay was not malicious in his actions and that many of the prosecutions were unfair.
“I think the tactics were really no different than what occurs in federal prosecutions across the board,” said Philip Hilder, a Houston attorney who represented several ex-Enron executives who cooperated with prosecutors, including Sherron Watkins, who famously warned Lay in late August 2001 that Enron could “implode in a wave of accounting scandals.”
Getting on with life
Watkins, who has been on the speaking circuit since the collapse, said she tried to stop talking about Enron, thinking no one was interested anymore.
“There remains a fascination about the details,” Watkins recently said from San Francisco, where she spoke at a company’s management conference on compliance and ethics.
Some of the convicted executives now free are also trying to move on, including Richard Causey, who was Enron’s chief accounting officer. He was released in October after serving more than five years in prison following a guilty plea.
“I’m thankful to be home, and I have a lot of sadness for the way things turned out for so many people,” Causey said in a brief phone interview.
Eden, 43, said losing his job at Enron helped give him the push needed to start his own company, Watering Made Easy.
“I don’t look back and wish Enron was still here,” he said. “There is a way of life after Enron.”
The key players: Where are they now?
Jeff Skilling
The ex-chief executive is serving a 24-year prison sentence for fraud and illegal insider trading but continues to push his case through appeal. His latest challenge came in September against an April ruling that upheld a potential error in the guidance that led to his 2006 conviction. His 20-year-old son, J.T. Skilling, died in February, but Jeff Skilling was not allowed to attend the funeral.
Ken Lay
The ex-company chairman was convicted of 10 counts of fraud and conspiracy, facing up to 165 years in prison. He died in Aspen of a heart attack in July 2006 while awaiting October sentencing. A federal judge vacated his conviction.
Andrew Fastow
The ex-chief financial officer is completing his prison sentence and is due to be released Dec. 17, when he will begin two years of probation.
J. Clifford Baxter
The ex-chief strategy officer committed suicide in 2002, after being called to testify before Congress.
Sherron Watkins
Enron’s ex- vice president of corporate development and the whistle-blower in the scandal co-authored a book called “Power Failure: The Inside Story of the Collapse of Enron” and is a public speaker on Enron and business ethics, and hopes to help victims of sex trafficking.
Sources: Financial News, Denver Post news services
