Former Enron official kills self

Ex-vice chairman is found dead in car amid rising scandal

Testimony had been sought

Executive resigned after voicing concern over financial moves

January 26, 2002|By NEW YORK TIMES NEWS SERVICE

HOUSTON - The body of a former Enron Corp. vice chairman who resigned in May after voicing concerns about the company's financial practices was discovered early yesterday morning inside his Mercedes-Benz after he apparently killed himself.

The former executive, J. Clifford Baxter, had complained last spring to Enron's management team, including Jeffrey K. Skilling, then the chief executive, about accounting measures used by the company, according to friends and former colleagues.

Baxter left Enron shortly after that, a decision the company attributed to his desire to spend more time with his family.

Baxter, 43, was discovered locked inside his car at 2:23 a.m. by a local constable working a private security detail inside the Sweetwater subdivision in Sugar Land, a suburb about 25 miles from downtown Houston.

Police investigators said Baxter had been shot once in the head with a .38-caliber handgun and have concluded that his death was a suicide. The police said he left a note but would not release its contents.

Baxter, married and the father of two children, had apparently been anguished over the problems at Enron and had recently been subpoenaed to testify before Congress.

He was among the many company executives sued by shareholders. One former business associate, who did not work at Enron, said Baxter broke down in tears during a telephone call Wednesday as they talked about the company.

Other former and current Enron colleagues described him as a brash deal maker and a "straight shooter" whose departure was widely attributed to clashes with Skilling and Andrew S. Fastow, the former chief financial officer.

"There was much speculation that there was conflict between him and Skilling," said one current Enron manager who often worked with Baxter. "And there were rumors that he was objecting to Andy Fastow's transactions."

Baxter's name had surfaced last week after congressional investigators released an internal memo, dated in August, from an Enron vice president, Sherron S. Watkins, to Kenneth L. Lay, who stepped down this week as the company's chief executive.

In the memo, Watkins warned Lay that the questionable financial structure of a series of secret "LJM" partnerships run by Fastow could destroy the company.

She also noted that other executives, including Baxter, had expressed concern.

"Cliff Baxter complained mightily to Skilling and all who would listen about the inappropriateness of our transactions with LJM," Watkins wrote.

In light of that memo, a Senate governmental affairs subcommittee had recently issued a subpoena to Baxter and had hoped that he would be a helpful witness, according to congressional officials.

Investigators from the House Energy and Commerce Committee, also citing the Watkins memo, had informed Baxter's lawyer last week that they wanted to speak to him, but no subpoena had been issued.

"It seemed to us that he was a pretty highly placed insider at Enron who had understood exactly what was wrong there," said Republican Rep. James Greenwood of Pennsylvania, chairman of the committee's Oversight and Investigations subcommittee. "Obviously, we're very sorry he has taken his life, and it adds to the depth of this tragedy."

A senior law enforcement official said the FBI was looking into Baxter's death and was investigating whether he had any documents that could be useful in the Enron investigation.

On its Web site, ABC News quoted law enforcement sources saying that the suicide note referred to the Enron scandal.

Baxter's wife declined to comment when a reporter knocked on the door of her home, which is less than a mile from where her husband's body was discovered.

Baxter's lawyer, J.C. Nickens, issued a statement:

"Those who knew Cliff Baxter will miss him. His friends' concern at this moment of personal tragedy is for his family, who wish to be afforded the opportunity to mourn his loss privately in peace and with dignity."

The former business associate who spoke by telephone with Baxter Wednesday said he had congratulated him "for being named among those people who complained about Enron, and all he said was `Thanks.'"

"Everyone in the executive suite at Enron knew of his complaints," the associate said.

Other than its appearance in the Watkins memo, Baxter's name has also surfaced as one of the 29 senior Enron executives named in a shareholder lawsuit seeking compensation for losses stemming from the collapse of the company.

Baxter sold more than 577,000 shares, the lawsuit said, worth $35.2 million over a three-year period before the bankruptcy. By comparison, Lay sold 1.8 million shares for $101 million and Skilling sold 1.1 million shares for $66.9 million. A high-level executive at Enron, who spoke on the condition of anonymity, said many people at Enron were feeling pressure from the news media coverage and various federal investigations.

"The media has pushed it over the edge," the executive said. "He may have been worried about what else is he going to do. Money is important, but a lot of people are worried about their reputations. Everyone at Enron is getting tarred with the same brush. Everyone is saying: `What's my future? What's my reputation?'"

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