ENRON’S DISASTER

There’s a great and honorable tradition about disaster at sea: Women and children first, and the captain goes down with the ship. For Enron, it’s been just the opposite. Kenneth Lay and the rest of the top executives paid themselves an average of $5 million apiece as the huge corporation staggered toward bankruptcy. And ordinary employees lost their jobs and most of their savings. The best they have been able to negotiate so far is severance pay capped at $13,500 apiece.

“Kenny Boy,” the former chairman and President Bush’s former buddy, got the most, according to a 16,000-word Enron filing in federal bankruptcy court. The company listed payments to Mr. Lay totaling $104 million, including salary, bonus, incentive payments, annuity contracts and loan advances of $81.5 million, mostly repaid with Enron stock. He also got $49 million in company stock.

Besides Mr. Lay, recipients of this lavish last-minute handout included former Chief Executive Jeffrey Skilling, former Chief Financial officer Andrew Fastow, and Army Secretary Thomas White Jr., who headed Enron’s energy-services branch. All are under investigation for allegedly misrepresenting Enron’s finances to deceive investors. Altogether, 144 executives got $745 million in payments and stock awards in the year leading up to the company’s filing under the bankruptcy law.

Fortunately, bankruptcy laws provide for something called “claw back.” Some payments during the approach to bankruptcy may amount to “fraudulent conveyance,” a legal term meaning a company’s transfer of assets without receiving adequate consideration. Lawyers for an employees’ committee say that getting satisfaction would involve separate complaints against executives who got “retention payments” binding them to stick with the sinking ship for at least 90 days.

Enron’s abuse of its lower-level employees is just one aspect of the shameful behavior of the one-time leader of the American big-business community. Whether company executives will be found to have committed criminal acts will depend on the vigor of a Justice Department task force and the evidence it digs up. As for the employees, a lot of litigation lies ahead, but at least they have a chance to get something to make up for lost jobs and savings.