Return to Transcripts main page

CNN Live At Daybreak

Enron Under Scrutiny; Former Enron Employees Try to Move On

Aired January 15, 2002 - 06:02   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.
CAROL COSTELLO, CNN ANCHOR: More on Enron now. It is defending itself from charges top executives sold more than a $1 billion of stock they knew would plummet while unsuspecting shareholders and employees took huge losses.

CNN's Tim O'Brien uncovers the layers of Enron probes.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT: A lawyer representing Enron shareholders said top execs from CEO Kenneth Lay on down knew of the company's pending collapse in plenty of time to cash in their stock, leaving shareholders holding an empty bag.

WILLIAM LERACH: Let's be direct here. These books were cooked by Lay, Fastow, Skilling and the other top executives who put hundreds of millions of dollars in their pockets while the employees of Enron were victimized and hundreds of thousands of other investors lost billions of dollars.

O'BRIEN: In a statement, Enron's attorney Bob Bennett said, "I am unaware of any evidence that supports the allegation there was improper selling by members of the Board or senior management. In many instances, the sale for the stock was preplanned according to a strict timetable."

The Arthur Andersen consulting firm has also issued a statement responding to a "Time Magazine" report that an internal company memo instructed employees to destroy Enron related documents, a possible obstruction of justice. The company said, "we acknowledge that there were internal communications that raised questions. Until we know more it would be inappropriate to comment further".

Meanwhile the Center for Public Integrity, a Washington-based public interest group, today reported that 14 high or mid-level officials in the Bush administration hold or held Enron stock. But the Center's director said neither that nor the huge campaign contributions Enron made to Bush and key congressional candidates is suspicious.

CHARLES LEWIS: The business community in general and the energy industry in particular has traditionally supported Republicans two to one or three to one in terms of campaign contributions for ideological reasons because of deregulation and the role of government in general. O'BRIEN (on camera): The immediate focus of all these investigations will surely be the actions or inactions of top officials at Enron and Arthur Andersen. But these inquiries will be sprawling and it's still early.

Tim O'Brien, CNN Financial News, Washington.

(END VIDEOTAPE)

COSTELLO: We are sure there will be lots more to come. Also this, Enron employees have faced a double whammy getting laid off while watching their 401 (k) savings go down the tubes. CNN's Ed Lavandera looks at a unique way one former Enron worker is picking up the pieces.

(BEGIN VIDEOTAPE)

JOHN ALLARIO: I'm a man and I'm also trying to work this - work this - work this meeting here.

ED LAVANDERA, CNN CORRESPONDENT: John Allario is working the phones trying to get his professional career back on track. He's one of 4,000 former Enron employees looking for a new job.

ALLARIO: I've had a little bit of time on my hands ...

LAVANDERA: So Allario's imagination took him online.

ALLARIO: I set up, or founded this web site which kind of pokes fun.

LAVANDERA: That web site laydoff.com, spelled L-A-Y-D-O-F-F, after the head of Enron Kenneth Lay, has become his best source of income selling T-shirts.

ALLARIO: The big seller in Texas is the Texas Found Justice, which investigate them, prosecute them, incarcerate them.

LAVANDERA: Allario found out he was fired while sitting at his desk. The phone rang and the voice on the other end told him he had 30 minutes to leave the building. That wasn't as painful as watching his retirement savings melt away. Forty percent of his 401 (k) was tied into Enron stock.

ALLARIO: It was incredible. To sit there - actually sitting in your desk, looking up, and watching the stock fall $10 at a time, sometimes within five minutes.

LAVANDERA (on camera): Dreams of financial security, stock options, and big bonuses lured thousands of people to Enron during the 1990's. They could have bailed last year during the slide, but no one ever really thought this company could collapse. Now almost every former employee you talk to is just trying to salvage whatever they can.

(voice-over): The Enron layoffs didn't just hit the rank and file. Allan Sommer was a vice president in charge of a 220-person department. On the day Enron declared bankruptcy ...

ALLAN SOMMER, FORMER ENRON EMPLOYEE: We were given by fax actually, nobody came over with it, we were given by fax, written instructions on what to say.

LAVANDERA: He summoned 220 people into an auditorium and told everyone their careers at Enron were over. Seven days later someone else told him the same thing. In Sommer's words, he was kept on long enough to do the dirty work.

ALLAN SOMMER: I have never been in a situation where I've experienced this much pressure. I've never been in a situation where there's been so little regard for the human side of the people.

LAVANDERA: John Allario was a Georgetown University graduate, now selling T-shirts on the Internet at $14 a piece. He says he feels like a kid opening a lemonade stand on the street corner.

ALLARIO: Simple, but it gets the point.

LAVANDERA: Ed Lavandera, CNN, Houston.

(END VIDEOTAPE)

COSTELLO: At least he came up with something to do though.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com