Enron
workers’
case may
reach U.S.
high court
By DON McINTOSH
Associate Editor
Oregon U.S. Sen. Gordon Smith
called on the Bush Administration
Aug. 10 to take the side of Enron’s
victims in a lawsuit that may end up
in the U.S. Supreme Court. Smith
made the call after learning that New
York-based Center for Justice and
Democracy and Oregon Attorney
General Hardy Myers would be stag-
ing a press conference near his Port-
land office, along with two Oregon
PGE/Enron workers. The workers
were among many who lost their life
savings when their 401(k)s, chock
full of Enron stock, were frozen as
the stock plummeted.
The stock price fell when it be-
came clear that Enron had commit-
ted fraud by reporting fictitious earn-
ings. Enron founder Kenneth Lay
was found guilty of 10 counts of se-
curities fraud, but died in July 2006
three months before he was sched-
uled to be sentenced.
CEO Jeffrey Skilling was con-
victed in 2006 of securities fraud,
conspiracy, and insider trading, and
sentenced to 28 months in prison.
Cooperating with federal prose-
cutors, Chief Financial Officer An-
drew Fastow pled guilty in January
2004 of wire and securities fraud,
and was sentenced to six years in
prison.
Arthur Anderson, the accounting
firm that signed off on the web of
improper transactions, voluntarily
dissolved in 2002 after it was was
convicted of obstruction of justice
for shredding documents related to
its audit of Enron.
But other companies were in-
volved, including large investment
banks that knowingly participated in
the fraud. In Fastow’s words, the
banks “would come up with struc-
tures and transactions that would
help Enron creatively solve its finan-
cial reporting problems.” In other
words, they loaned money to sham
companies they helped create in or-
der that Enron could pretend debt
was revenue in reports to sharehold-
ers.
“Enron by itself was a shell,” said
AUGUST 17, 2007
OREGON AFL-CIO
PGE retiree Gary Kemper
(left) and union lineman Roy
Rinard call on the Bush
Administration to side with
defrauded Enron share-
holders over the banks that
helped defraud them.
The officers, executive board
and staff extend to all Union Members
Labor Day
Greetings!
Working Together to Make Jobs Better
T OM C HAMBERLAIN , President
B ARBARA B YRD , Secretary-Treasurer
J ENNIFER S ARGENT , Research & Communications Director
D UKE S HEPARD , Campaign/Political Director
S TEVE L ANNING , Field Rep; E LANA G UINEY , Organizing Coordinator
B OB T ACKETT , WIA Labor Liaison;
S UE H ARRISON , Secretary; T AMMY A NDERSON , Bookkeeper
retired PGE lineman Gary Kemper
at the Aug. 10 press conference in
Portland. “They needed the banks’
money to do what they did.”
Shareholders, including Kemper
and other PGE workers who owned
Enron stock in their 401(k)s, sued
the investment banks in 2002 to re-
cover losses, estimated at over $40
billion.
Bank of America, Citigroup, JP
Morgan Chase, Lehman Brothers,
and Canadian Imperial Bank of
Commerce settled out of court for $7
billion. But other banks — including
Merrill Lynch, Credit Suisse First
Boston, and Barclays Bank — re-
fused to settle. In March 2007, the
Fifth Circuit Court, based in Hous-
ton, ruled that the banks weren’t li-
able to the victims. So it will be up
to the Supreme Court to decide, by
setting the legal principle in a related
case, Stoneridge Investment Partners
v. Scientific-Atlanta, Inc.
Myers was among 33 state attor-
neys general who submitted briefs in
support of investors.
Normally, the Securities and Ex-
change Commission (SEC) would
also intervene on the side of stock-
holders in such a case, filing an “am-
icus brief” with the Supreme Court.
And the SEC voted to do so. But the
Bush Administration has refused to
allow the SEC to file a brief in sup-
port of investors.
Kemper, who retired for medical
reasons, said he and his wife had
wanted to go to the Holy Land when
they retired. “Now we’ll have to see
it on the History Channel. I’m sure
many of those bankers didn’t go
through that,” Kemper said, “yet
somehow the Bush Administration
can side with the banks.”
“If I work until I’m 67, I won’t
have the money in my 401(k) that I
had in 2001,” said PGE worker Roy
Rinard, 59. Rinard, a member of In-
ternational Brotherhood of Electrical
Workers Local 125, estimates he lost
close to $500,000 when Enron col-
lapsed. “All we’re asking is to have
our day in court.”
Briefs in the Supreme Court case
were due Aug. 15, after this issue
went to press.
Salem 503-585-6320
Portland 503-224-3169
• Making our voices heard on the issues
that affect retirement security
• Educating older workers on issues that matter
• Keeping Labor retirees connected to their unions
503.284.8591
sdzielak@retiredamericans.org
Cement Masons Local 555
Wishes all our union friends
a
Safe and Happy Labor Day
“Building Our Future”
12812 NE Marx Street, Portland, Oregon
503-232-9341
NORTHWEST LABOR PRESS
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