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CNN Live Saturday

Police Investigate Apparent Suicide of Former Enron Executive

Aired January 26, 2002 - 12:04   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: We turn our attention now to the Enron investigation and the apparent suicide of a former Enron executive. For more on that, we go to Houston, Texas, and CNN's Fred Katayama -- hi there, Fred.

FRED KATAYAMA, CNN CORRESPONDENT: Hi there, Fredricka. Well, police in Sugarland, Texas, just outside of Houston where John Baxter lived, are combing through the suicide note that he left behind. Baxter was formerly the vice chairman of Enron, and he was found dead 2:30 Wednesday morning with a single gunshot wound to the head. A 38- caliber revolver was found nearby.

Police are not revealing where they found the suicide note or the contents just yet. The body has been delivered to the Medical Examiner's office, and police hope to hear back from the examiner the results of the autopsy in a few days' time.

Now, Baxter's name came up in the memo left behind by the whistleblower, Sherry Watkins. Watkins had said that John Baxter has questioned the accounting practices of Enron with its then president. And so he is seen as a potential whistleblower.

Friends of Baxter, whom I spoke to, described him as having been rather disappointed, even depressed over the past few days. Some people speculating he has suffered a lot of stress, because he has been named in some of the shareholder lawsuits out there, and congressional investigators had been trying to talk to him.

Over in Washington, the White House says it will review a set of federal contracts signed between -- signed by Arthur Andersen and Enron. There are more than 100 such contracts valued at about $60 million. The head of the Office of Management and Budget, Mitch Daniels, initiated the probe into those federal contracts.

Now, there are a lot of losers when we're talking about Enron, the employees were fired, the shareholders who lost billions of dollars. But as for the employees, a lot of them were promised severance payments, and many of them haven't gotten a single dime.

(BEGIN VIDEOTAPE)

(voice-over): Many Enron workers in the glory days got rich off stock options, but Janice Hollaway doesn't have many options, and we're not talking about the stock kind. When Enron laid her off in November, she says the company offered to double her severance pay to $37,000 if she also signed a waiver, a contract promising she would not sue Enron or file for state unemployment benefits.

But Enron filed for bankruptcy one month later, and she never received her severance pay.

JANICE HOLLAWAY, FORMER ENRON EMPLOYEE: I feel betrayed. I'm angry. I'm upset. I mean, all of the, you know, normal emotions that anyone would feel at being promised something and not getting it. And you know, I signed a contract, and also the contract precludes me from filing for unemployment, and I've been afraid to do that.

KATAYAMA: Instead, she joined a team of ex-Enron employees in a class action suit.

Richard Rathvon was laid off too, but he is taking a rare novel path. He teamed up with 20 other former employees to try to win back millions owed in bonus pay. They're not filing suit, but forming a committee. They want a say in the bankruptcy proceedings, alongside the banks and other bigger creditors.

RICHARD RATHVON, FORMER ENRON EMPLOYEE: The employees are not focused as a group. There is misinformation that is going around by e-mails from one employee to another. Again, setting up a committee would give us a single voice, and it would give us access real-time to accurate and timely information, and that's absolutely critical in our ability to protect our claims.

KATAYAMA: Legal experts say at best, the employees may get pennies on the dollar they're owed. In bankruptcy proceedings, unsecured creditors, like shareholders and employees, are last in line.

But Rathvon's lawyer says a committee is better than a class action suit.

DAVID MCCLAIN, MCCLAIN & SIEGEL: If you're not at the table, you can't negotiate. And at the end of the day, the employees have some of the largest claims that exist in this case, and they are just simply divorced from the process.

KATAYAMA: The committee option worked for 18,000 laid off workers of Ames Department Store. In 1990, they won $24 million in vacation and severance pay.

(END VIDEOTAPE)

KATAYAMA: In Enron's case, however, it may be extremely difficult for its former employees to get anything at all. Enron's debt is so huge and its assets are shrinking so fast that there may be no money left once the bigger creditors, like the banks, get paid -- Fredricka.

WHITFIELD: All right, thanks very much -- Fred Katayama coming from Houston there on the ever-changing Enron debacle. We'll continue to follow that -- thank you. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com