Enron executives Kenneth Lay
and Jeffrey Skilling found guilty
Enron founder Kenneth Lay was
convicted May 25 of all six counts
against him, including conspiracy to
commit securities and wire fraud. For-
mer Enron Chief Executive Jeffrey
Skilling also was convicted of conspir-
acy to commit securities and wire fraud
in one of the biggest business scandals
in U.S. history.
“I am thrilled, absolutely thrilled!
This finally settles things,” said Debbie
Perrotta on hearing the verdict. Perrotta,
along with 21,000 of her co-workers,
lost everything when Houston-based
Enron went belly-up five years ago in a
maze of bogus offshore companies, lies
and fraud.
Among the hardest hit were some
1,000 Electrical Workers Local 125
members employed at Portland General
Electric, a subsidiary of Enron.
While Enron’s top managers sold $1
billion of their stock before they an-
nounced that the company had lied in
its financial reports, PGE workers were
locked out from changing the stock al-
locations in their 401(k) pension plans.
When they finally were allowed access
the stock was at trading at 26 cents a
share. Workers lost millions of their
pension dollars.
Local 125 filed grievances under the
union contract, arguing that PGE had
failed to act prudently to protect work-
ers pensions. The grievance got to step
two of the process, but then PGE de-
cided the issue was outside the scope of
the grievance process and successfully
filed suit against the union, asking a
judge to rule that the issue was not sub-
ject to arbitration.
During the nearly four-month trial,
Lay and Skilling claimed there were no
crimes at Enron and blamed investor
loss of confidence and media reports for
the company’s downfall, according to
news reports.
Perrotta says she feels vindicated
that Lay and Skilling were convicted. “I
know they will probably appeal. But let
them use all their money on lawyers.
I’m so glad the jury didn’t believe them.
They were so sure of themselves on the
stand.”
Perrotta has no sympathy for Lay’s
reported financial problems. Lay said
he made more than $100 million in cash
and stock gains in 2000. Since Enron
collapsed, Lay said he and his wife sold
three houses in Galveston, Texas, and
three in Aspen, Colo. Lay, whose de-
fense has cost nearly $23 million, said
he now is worth negative $250,000—
and still owes $7.5 million to Enron for
money he borrowed from a corporate
revolving credit account.
“I don’t feel sorry for him at all,”
says Perrotta, who was unable to make
mortgage payments after she lost her
job at the same time her husband lost
his. She says the Enron disaster bears
an important lesson for workers. “I
want to tell workers that you have to
watch out for yourself and fight for your
rights.”
AFL-CIO President John Sweeney
said, “The collapse of Enron exposed
the culture of greed that permeates cor-
porate America, often in wanton disre-
gard of workers’ and investors’ rights
and interests.”
Enron’s collapse took with it more
than $60 billion in market value, almost
$2.1 billion in pension plans and 5,600
jobs.
“The Enron bankruptcy exposed
major vulnerabilities in working fami-
lies’retirement security and the dangers
of privatizing Social Security,”
Sweeney continued. “Enron also
showed the fundamental flaws in CEO
pay and how executive stock options
can create a strong incentive to fraudu-
lently manipulate company stock
prices.
“The conviction of Chairman Ken-
neth Lay and CEO Jeffrey Skilling
shows that executives cannot lie their
way out of the mess that they created.
However, it must be remembered that
the collapse of Enron did irreparable
harm to working people, and no amount
of jail time can fix that.”
(Editor’s Note: James Parks, a
writer for the national AFL-CIO Now
Web blog, contributed to this report.)
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