Former Enron executive found dead; suicide note left
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J. Clifford Baxter, 43, was one of five high-ranking Enron executives identified in a whistle-blower's letter as objecting to accounting maneuvers that ultimately pushed the company into bankruptcy. He had been subpoenaed by a Senate committee investigating the demise of Enron, and his death leaves a void for investigators who had hoped to interview him.
Baxter and 28 other past or current company officials also had been sued by shareholders who lost billions of dollars in the collapse of the once-giant energy trader late last year. The lawsuits say the executives were presenting a falsely positive view of the company's financial health to boost the stock price.
Mitch Taylor, an executive in Enron's trading operation, called Baxter a man of "extremely high integrity."
"I don't believe he was (complicit) in anything that may or may not have gone on here," Taylor said. "But he was the vice chairman. It happened on his watch. I'm sure he felt horrible."
Baxter had stepped down from the company in May, seven months after winning the vice chairman's post. He said he wanted to spend more time with his wife and two school-age children.
"He left here because he was frustrated," Taylor said. "He felt he was going to be burdened with the responsibility for things that occurred but given none of the responsibility to change them."
Sources close to Baxter said yesterday that he had challenged former Chief Executive Jeffrey Skilling on Enron's controversial off-balance sheet partnerships, and resigned because he had been unable to stop them.
"He had enough money. He didn't have to work there anymore," one colleague said. "Cliff would feel guilty about what he didn't do. That was the nature of who he was."
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 waste-water business in Great Britain.
Enron had tried to turn a small Internet transmission unit at Portland General into a nationwide fiber-optic network, and had hoped to make Wessex the foundation of a new line of business. Both ventures failed.
Baxter's red-brick mansion in the Houston suburb of Sugar Land was guarded yesterday by three police officers. A U.S. flag adorned the front door, and the shutters were closed. Friends, greeted by hugs, dropped in throughout the day.
"We are suffering the loss of our husband, father and best friend," the family said in a statement.
Baxter's body was found by a police officer about 2:30 a.m. in a black 2002 Mercedes sedan parked near Sweetwater Country Club, less than two miles from his home.
He suffered a single gunshot wound to the head, and a revolver was found by his side, police said. Police said he also left a suicide note, but declined to disclose its contents or say where it was found.
ABC News, citing two Enron sources, reported that Baxter was depressed and concerned about being questioned about activities of former colleagues and friends. The network, quoting law- enforcement sources, reported that the suicide note said he could not stand the pain of the scandal.
A local justice of the peace ruled Baxter's death a suicide but ordered an autopsy.
Baxter spent a decade at Enron during the years it morphed from a middling operator of natural-gas pipelines into a "new economy" company that placed high-tech bets through its computerized trading operation on a wide range of energy and other commodities.
He zoomed up the ladder in the slipstream of his good friend Skilling, who resigned as Enron's chief executive in August for unexplained personal reasons.
Skilling expressed sadness at Baxter's death.
"Mr. Skilling is devastated by the loss of a very dear friend," said Judy Leon, a spokeswoman for Skilling.
Baxter cashed out $28 million in stock gains from the sale of nearly 800,000 Enron shares from 1998 to early 2001, according to an analysis by Thomson Financial/Lancer Analytics. Since then, Enron's stock price has plunged from about $81 a share, the best price Baxter commanded, to mere pennies.
Proceeds from Baxter's stock gains 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.
Enron issued a terse statement yesterday: "We are deeply saddened by the tragic loss of our friend and colleague, Cliff Baxter. Our thoughts and prayers go out to his family and friends."
According to an internal memo written last August by Enron Vice President Sherron 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 Skilling and all who would listen about the inappropriateness of our transactions with LJM," according to the memo, sent by Watkins to Kenneth 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."
Skilling last week denied that he had conversations with Baxter or other Enron officials about accounting problems at the company.
Baxter's records had been subpoenaed by the Senate permanent subcommittee on investigations. But, as of the time of his death, Baxter had not delivered any documents, which were due by Jan. 31, according to a source.
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.
Other Enron developments:
• The White House ordered a review of $70 million worth of federal contracts with Enron and the Andersen accounting firm to determine whether the companies are worthy of government business.
• The White House last spring apparently added to the Bush administration's energy policy a last-minute provision that was helpful to Enron. Rep. Henry Waxman, D-Calif., produced a draft of the energy plan that contained no language that would have Bush Cabinet secretaries push energy development in India, where Enron had a money-losing power plant. The language was in the final energy plan.
• Leaders of the House Energy and Commerce Committee, which has been investigating Enron and Andersen, wrote to Lay, Enron's former chairman, asking for information on his sales of Enron stock.
Information from Seattle Times news services is included in this report.