-Caveat Lector-
From
http://oregonlive.com/news/oregonian/index.ssf?/xml/story.ssf/html_sta
ndard.xsl?/base/front_page/10086801253137391.xml
}}}>Begin
Retirees, workers speak out on Enron
12/18/01
STEVE WOODWARD
As 2001 dawned, Tim Ramsey felt like a million bucks.
A 55-year-old electrical worker, Ramsey was ready to take early
retirement after 33 years with Portland General Electric. His
retirement nest egg, fed by more than three decades of steady saving,
had grown into a golden goose egg worth more than $1.25 million.
As the year ends, the $1 million portion invested in Enron stock has
collapsed to less than $10,000, and Ramsey's retirement plans are
nothing more than a wistful fantasy.
"I was a big sucker," the Dundee resident recently mused. "For some
reason -- I don't know why; I should have my butt kicked -- I
listened to those people."
"Those people" are executives of Enron, the once-mighty Texas energy conglomerate that
bought PGE in 1997 in a stock-and-debt deal valued at nearly $3 billion.
Today, the U.S. Senate Commerce, Science and Transportation Committee is scheduled to
hear the stories of some of Enron's 21,000 employees who, like Ramsey, put their trust
and much of their retirement savings into Enron.
Ramsey will not be among those testifying, but a PGE employee and retiree are on the
witness list.
Dozens of employee lawsuits have been filed since the plight of employee shareholders
-- barred from selling their Enron shares as the stock plunged -- first was reported
in The Oregonian on Nov. 16. Since then, the unpre
cedented collapse of many employees' stock-based 401(k) accounts has taken on a life
of its own.
Congressional interest in the workers' predicament shows the potential influence the
Enron debacle could have on public policy, including the rules governing employee
retirement accounts.
Enron employees and retirees have lost their trust and most of their savings, as Enron
has acknowledged it had overstated its profits for more than four years and filed the
largest bankruptcy case in U.S. history. From a
52-week high of $84.88 a share in January, the stock has fallen to 57 cents a share,
as of Monday.
Particularly galling to employees was the so-called lockdown: a period from late
October to Nov. 12 in which their accounts were frozen during a transfer of records to
a new plan administrator.
Enron says the lockdown began Oct. 29, while at least one employee lawsuit cites Oct.
17 -- the last day that Enron stock was above $30 a share.
Whichever date is correct, employees were unable to access their accounts during the
period in which Enron dropped a bombshell: It announced that it would have to restate
41/2 years' worth of financial results because of
accounting errors.
In response, investors dumped tens of millions of shares daily. But because of the
lockdown, PGE employees were not among them.
"I got wiped out -- period," Ramsey said.
Some employees who discussed how the crisis has affected their lives acknowledged
responsibility for their investing decisions. But their frustration and Congress'
attention remains focused on corporate policies and pract
ices that promoted Enron stock.
Ramsey, like 80 percent of PGE's 2,700 employees, took advantage of a voluntary
corporate savings plan -- in addition to a pension plan for many employees -- that
enabled them to pile up Enron stock as part of their retir
ement savings. The savings plan, a tax-deferred 401(k) plan, allowed participating
employees to contribute up to 15 percent of their pay to their accounts. A portion of
the employee contribution was matched by PGE with En
ron stock.
The plan prohibited employees from selling the Enron stock unless they were 50 or
older. But employees were free to invest their own contributions in any of 20
different options -- including Enron stock.
Many employees loaded up on Enron. And why not? Between price increases and stock
splits, the value of an Enron share quadrupled between the July 1997 merger with PGE
and January of this year. Corporate headquarters passe
d out crisp, new $50 bills to all employees when the stock cracked $50 a share in
1998. And when the stock climbed into the $80 range early this year, company
executives touted Wall Street estimates that the stock price c
ould rise to $120 a share by August.
"You get this false impression that everything is good," said Pat Betteridge, a
53-year-old PGE repairman who has put off an early retirement after losing nearly
$300,000 on his 3,500 Enron shares.
Betteridge remembers the grand claims of Kenneth Lay during one of the Enron
chairman's trips to Portland: "We'd like to look at ourselves as the Microsoft of the
energy world," Betteridge said Lay told employees gathered
for a meeting at Memorial Coliseum.
Like many PGE employees, Betteridge didn't put all of his 401(k) savings into Enron
stock. As a result, he still has $145,000 left in his 401(k) account, anchored by
Intel stock. Moreover, he has a PGE pension, and his wi
fe, a teacher's aide in Oregon City, will have income from her Oregon Public Employees
Retirement System pension. And both will be able to draw Social Security benefits.
The 27-year PGE veteran still expects a comfortable retirement someday, but he said he
believes Enron waged "corporate terrorism" by failing to protect its employees from
extraordinary vulnerability to the stock's decline
.
"If they'd hired me to do electrical work and I botched it as bad as them," he said,
"I'd either be doing time, or I'd get my license yanked."
Wallis Hoffarth watched $600,000 of his retirement savings disappear -- even though he
retired more than a year before Enron bought PGE.
"My whole damn life, I put into it," said the 65-year-old Hoffarth, who retired to his
Sandy home five years ago, when his late wife suffered a recurrence of breast cancer.
"Now it ain't worth (anything)," he said.
Hoffarth had accumulated $120,000 of stock in Portland General Corp., PGE's former
owner, through a 401(k) plan and an employee stock ownership plan. When Enron bought
PGE, Hoffarth was forced to swap his Portland General
shares for Enron shares -- he recalls paying $12 to insure the mailing of the stock
certificates.
Through stock splits, his Enron holdings grew to 7,200 shares. Those shares, worth
about $600,000 in January, are now worth less than $5,000.
Hoffarth still gets $1,725 a month from his PGE pension and $1,100 a month from Social
Security. But his current income doesn't leave him much room for unplanned expenses,
such as the $4,300 he just paid his dentist for t
wo tooth implants and caps.
"If people find I'm dumb enough to own that Enron stock," Hoffarth said, "They'd be
knocking on my door, trying to sell me the Brooklyn Bridge."
Hoffarth and others said they were trying to think like disciplined, long-term
investors as they watched the months-long decline in Enron's stock price. The stock
market, after all, was declining.
"You're trained to think long-haul by all the experts," said Dave Covington, 42, a
lineman who went to work for PGE at age 20.
But disciplined, long-term thinking was not what sold Covington and other PGE
employees on filling up their portfolios with Enron. They acknowledge they were drawn
by the dazzle of Enron's fast revenue growth, Wall Street
adulation and rosy executive forecasts, as well as Enron's stature as the seventh
biggest revenue- producing company in the nation.
"A lot of people got mesmerized by that," said Gary Kemper, a 58-year-old maintenance
foreman who is suing Enron over his $200,000 in losses. "Some people I know put
everything in it."
People like Covington.
"A lot of us jumped on the bandwagon," said Covington, the father of two school-age
children. "I was 100 percent into Enron when the price was pretty high."
Nervous about having so much retirement money tied up in a single stock, Covington
transferred about 20 percent of his Enron holdings into technology stocks, then
suffered a double-whammy with the tech-stock crash.
A retirement fund once worth $319,000 now hovers at about $21,000.
"That's 22 years of sweat equity down the tubes," Covington said.
Tim Ramsey, the erstwhile Enron millionaire, said he should have listened to a
financial adviser who cautioned him to diversify his holdings.
"I was greedy, along with everybody else," he said.
Barring a miraculous rise in Enron's stock price, Ramsey must count on Social Security
and a $250,000 lump- sum cash pension from PGE eventually to support him and his wife,
a retired waitress who has no pension.
Until then, there's always a regular paycheck.
"All I can do," Ramsey said, "is just keep working."
/tagYou can reach Steve Woodward at 503-294-5134 or by e-mail at
[EMAIL PROTECTED]
Copyright 2001 Oregon Live. All Rights Reserved.
End<{{{
~~~~~~~~~~~~~~~
Forwarded as information only; no endorsement to be presumed
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
In accordance with Title 17 U.S.C. section 107, this material
is distributed without charge or profit to those who have
expressed a prior interest in receiving this type of information
for non-profit research and educational purposes only.
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + +
The only real voyage of discovery consists not in seeking
new landscapes but in having new eyes. -Marcel Proust
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Do not believe in anything simply because you have heard it. Do not believe
simply because it has been handed down for many generations. Do not
believe in anything simply because it is spoken and rumored by many. Do
not believe in anything simply because it is written in Holy Scriptures. Do not
believe in anything merely on the authority of Teachers, elders or wise men.
Believe only after careful observation and analysis, when you find that it
agrees with reason and is conducive to the good and benefit of one and all.
Then accept it and live up to it."
The Buddha on Belief, from the Kalama Sutta
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
A merely fallen enemy may rise again, but the reconciled
one is truly vanquished. -Johann Christoph Schiller,
German Writer (1759-1805)
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
It is preoccupation with possessions, more than anything else, that
prevents us from living freely and nobly. -Bertrand Russell
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Everyone has the right...to seek, receive and impart
information and ideas through any media and regardless
of frontiers."
Universal Declaration of Human Rights
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Always do sober what you said you'd do drunk. That will
teach you to keep your mouth shut."
--- Ernest Hemingway
<A HREF="http://www.ctrl.org/";>www.ctrl.org</A>
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please! These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://peach.ease.lsoft.com/archives/ctrl.html
<A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of
[EMAIL PROTECTED]</A>
http:[EMAIL PROTECTED]/
<A HREF="http:[EMAIL PROTECTED]/";>ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
