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Last Updated: Friday, 27 January 2006, 15:26 GMT
Caught in the Enron collapse
Courtroom in Houston where Enron case will be heard
The Enron case will be heard in Houston
After US energy giant Enron collapsed four years ago following massive fraud, the city of Houston - home of the company - was greatly affected.

With the two men who led the company set to stand trial on Monday, the BBC examines how people's lives have been changed by what happened.

Around 4,500 employees were sacked following Enron's collapse. Most lost their financial nest-eggs - which had been ploughed into Enron's own shares, in what are known as 401k pensions.

"It's been a long tough road - we've just tried to battle through all the obstacles," 60-year-old Angelina Lorio, a former Enron management assistant, told BBC World Service's Assignment programme.

"They say there's always life after Enron. But I don't know about that."

'It's very unfair'

Ms Lorio, who was with the company for 28 years, is $500,000 (280,000) poorer than when she was employed by the company.

Having lost her pension and savings, she sold her home and lived off the money from that. When that ran out, she started using her credit cards, leaving her in serious debt.

Enron building
At bottom was a cheat on a gigantic scale - and the real question now is, who knew about the cheat, and when?
Professor Nancy Rapaport, Dean of Law
Debra Johnson, a former member of Enron's support staff, was another of those affected - she lost $50,000. Since the crash, four years ago, she has only had temporary work, and it is unlikely she will ever recover her financial security - effectively meaning she can never retire.

"Day by day, there's nothing," she said.

"There is no car. I don't know how long I'm going to have the key to the apartment I'm in at the moment.

"Month to month, I've been having to beg and borrow in the hope of repaying those that have invested in me. But it's a hard struggle.

"The employees have lost all round. The executives and the attorneys have won. The rich get richer, the poor get poorer... it's very unfair."

John Enerson, a former Enron vice-president - who lost $2m following the collapse - said that being inside the company the day after the bankruptcy was declared was like "a neutron bomb had gone off."

Mr Enerson was one of the few employees that stayed on at the company immediately after 3 December, the date the company filed for bankruptcy. He said that two days later, he found out about the "midnight bonuses" - the $105m of bonuses that went out just before the bankruptcy to individuals.

"That just took a lot of wind out of my sails," he said.

"It seemed to be the last gasp of looting in the organisation."


Some who have lost out are angry that former Enron chief Ken Lay, whose trial is to begin on Monday, remains very wealthy.

Professor Nancy Rapaport, Dean of the Law School at the University of Houston, explained that she sees this as one of the chief lessons of the Enron saga - the story of two separate classes competing against each other.

She said that "very smart, very well-off people" had been "going beyond pushing the limits of what the law allowed them to do, and the normal working person was caught in the crosshairs of that.

Kenneth Lay
Lay told Houston business his trust was misplaced
"So what Enron did was take deals that could be normal in business, and perverted them in a way that allowed Enron to cheat on the structures of the deal.

"At bottom was a cheat on a gigantic scale - and the real question now is, who knew about the cheat, and when?"

Mr Lay faces seven charges of fraud and conspiracy, while former chief executive Jeff Skilling faces 35 separate counts of fraud, conspiracy, insider trading and lying to auditors.

Both men have maintained their innocence throughout.

However, 17 people have already pleaded guilty to various offences connected with the Enron affair, while five others have been convicted.

But Mr Lay argues he knew nothing of any wrongdoing at Enron, and, at a dinner of business chiefs in Houston last month, he placed the blame on former chief financial officer Andrew Fastow - who has admitted setting up shadow companies.

However, he also expressed regret for what happened, describing what former employees are having to endure as "the most devastating and heartbreaking tragedy of my life, and [it] will assuredly continue to haunt me until my death."

City recovering

Mr Lay's lawyer, Mike Ramsey - who described his client as "absolutely not guilty" - said he hoped for a lot of time during jury selection, as "people have taken very radical positions about the case," he said.

"We're careful to pick a jury that can come into the case with an open mind," he added.

Questionnaires sent out to 400 potential jurors showed many of them felt negative about Enron, and were heated or emotional in their perception about what happened there.

But others feel that the city of Houston is used to recovering from massive crises, and has already moved on a lot from Enron.

"It was a bump in the road for Houston - and what the city fathers would prefer now is that no-one ever hears the word 'Ken'," Mimi Swartz, author of one of the 86 books on the scandal and a native Houstonian, told Assignment.

"In a way, I hope Houston has learned a lesson, because it wasn't just Enron that has suffered from this - all of the big energy companies were casualties, because they were all so envious of Enron that they aped their management and trading style."

"But again, this is a city that doesn't want to remember. They're not introspective - they just pick themselves up and start over again. That's what they've done."


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