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Enron baxter dead { January 26 2002 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A40635-2002Jan25.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A40635-2002Jan25.html
Ex-Enron Executive Found Dead in Car
Police Say Gun, Note Point to Suicide
By Paul Duggan and Peter Behr
Washington Post Staff Writers
Saturday, January 26, 2002; Page A01
The collapse of Enron Corp., the biggest business failure in U.S. history, took on another dimension of tragedy yesterday as a former vice chairman of the company was found dead of an apparently self-inflicted gunshot wound in his car near Houston, police said.
Authorities said they found a suicide note, but had not disclosed its contents last night.
J. Clifford Baxter, 43, who resigned from Enron last May, was one of a handful of current and former Enron executives whose testimony is central to federal and congressional investigations into the company's demise. He and 28 other past or current company officials have been named as defendants in civil litigation brought by shareholders who lost billions of dollars when the once-giant energy trader spiraled into bankruptcy late last year.
Baxter reportedly complained to other Enron officials about the company's questionable financial practices before his resignation, but he also benefited from the high stock prices that resulted from those practices. He cashed in $35 million in Enron shares before the stock's final crash late last year. The shareholder lawsuits allege that Baxter and the other defendants concealed Enron's deteriorating financial condition last year while selling several hundred million dollars in company stock.
In Sugar Land, the upscale Houston suburb where Baxter lived, police said he was found dead at 2:23 a.m. yesterday in the driver's seat of his locked 2002 Mercedes-Benz sedan, parked on the side of a four-lane thoroughfare less than two miles from his home.
"There was no sign of foul play," said police spokeswoman Patricia Whitty, adding that authorities found the suicide note and a .38-caliber revolver with which Baxter apparently had shot himself in the head. The Houston Chronicle, citing unidentified sources, reported on its Web site last night that the note referred to the Enron scandal.
The discovery of his slumped-over body by a local constable working as a neighborhood security guard is the latest and most tragic chapter in the still-unfolding story of Enron's epic collapse. Once the nation's largest energy trader and a prodigious financial contributor to politicians of both major parties, notably President Bush, the Houston-based company was brought low by business practices that are the focus of investigations by an array of government agencies and at least 10 congressional committees.
"We are deeply saddened by the tragic loss of our friend and colleague, Cliff Baxter," said Enron spokesman Mark Palmer. "Our thoughts and prayers go out to his family and his friends."
Proceeds from Baxter's cashing-in of Enron stock had helped establish a foundation named for him and his wife, Carol Whalen. Newsday reported that the foundation made modest donations to the American Cancer Society, Junior Achievement, various charities involved in diabetes research and a Catholic parish in Sugar Land.
Before his resignation, Baxter was one of Enron's principal dealmakers, heading teams that purchased major energy projects and other properties around the world.
Some of his deals worked well for the company. But he also led the acquisitions that became two of Enron's costliest mistakes, financial analysts say -- the purchases of Portland General Electric, an Oregon utility, and Wessex Water, a water and wastewater business in Great Britain. Enron tried to turn a small Internet transmission unit at Portland General into a nationwide fiber-optic network, and hoped to make Wessex the foundation of a new line of business. Both ventures failed.
According to an internal memo written last August by Enron Vice President Sherron S. Watkins, Baxter was one of several top Enron executives who opposed the company's use of a complex network of private investment entities tied to an offshore partnership, LJM Cayman L.P. The partnership's activities included the purchase of Enron assets, which removed debt from Enron's balance sheet, thus supporting the company's credit rating and bolstering its stock price.
"Cliff Baxter complained mightily to [Enron's then-chief executive Jeffrey] Skilling and all who would listen about the inappropriateness of our transactions with LJM," according to the memo, sent by Watkins to Kenneth L. Lay, who resigned Wednesday as Enron's chairman and chief executive. In a prophetic warning, Watkins wrote, "I am incredibly nervous that we will implode in a wave of accounting scandals."
Enron's collapse accelerated in November, when the company disclosed that the questionable accounting practices involving LJM had caused it to overstate profits by $486 million over four years.
In interviews, some former Enron employees said Baxter's motives for complaining about the LJM arrangement were unclear. They said Baxter and other top Enron executives objected to an unusual perk given to Enron's then-chief financial officer, Andrew S. Fastow, who was permitted to manage LJM and profit from its investments. Enron's board of directors authorized Fastow's dual role as a senior Enron official and manager of the offshore partnership.
"He [Baxter] was upset because Fastow was bending the ruler way past the point where anyone else could go," said one former executive, who declined to be identified.
Fastow was forced out of his Enron position in October as news of Enron's losses became public. The company disclosed after his departure that he had received $30 million from the LJM group.
It is unclear whether Baxter's complaints about LJM played a part in his resignation last May after a decade with the company. In a May 2 press release, Skilling said, "While we will miss [Baxter], we are happy that his primary reason for resigning is to spend additional time with his family." Skilling said Baxter would "continue working for the company as a consultant."
Baxter's lawyer, J.C. Nickens, declined to discuss his client's death yesterday.
"Those who knew Clifford Baxter will miss him," Nickens said in a statement. "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."
On Ellicott Way in Sugar Land, where Baxter and his wife lived in a brick, Colonial-style home worth about $550,000, neighbor Tom Swonke described the couple as quiet and private, saying they rarely interacted with others on the street. Swonke said the Baxters, parents of a son and daughter, spent much of their free time aboard their 72-foot yacht, Tranquility.
"They weren't here most of the time," Swonke said. "I've never had a face-to-face conversation with him."
Baxter grew up in Amityville, N.Y., and studied finance and management at New York University, where he received a bachelor's degree with honors, according to Enron. He received a master's degree in business administration from Columbia University, and was valedictorian of his class.
Before joining Enron in 1991, Baxter was an Air Force captain and later an investment banker. At Enron, the company said, he focused "on the strategic positioning of the company, as well as major corporate initiatives, including acquisitions and divestitures." He also served as chief executive of Enron North America, the company's largest unit, and was a senior vice president of corporate development.
In 1999-2000, he and his wife made $14,270 in political contributions, almost all of it to the Republican Party, Republican candidates or Enron's political action committee.
In announcing Baxter's resignation in May, Skilling praised his "tremendous contribution to Enron's evolution, particularly as a member of the team that built Enron's wholesale business. His creativity, intelligence, sense of humor and straightforward manner have been assets to the company throughout his career."
Staff writer Robert O'Harrow and researchers Madonna Lebling, Lucy Shackelford and Richard Drezen contributed to this report.
© 2002 The Washington Post Company
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