Cliff Baxter had worked hard for all the trappings of a Texas millionaire's life, but the cowboys at Enron had hog-tied his career. Sure, he had the $700,000 house in an exclusive suburb of Houston, a new 2002 Mercedes-Benz S500 sedan in the driveway and a 72-ft. yacht named Tranquility. With millions of dollars in the bank, he and his wife had established a charity to help kids with diabetes and cancer, and Baxter was even considering a new career in teaching. A smart, funny Long Islander who served five years in the Air Force and graduated first in his M.B.A. class at Columbia University in 1987, Baxter, 43, found his place with a bunch of brash Texans building the energy company of the future and rose to become vice chairman. But long before Enron went bankrupt, Baxter realized it was shady. Last week that knowledge helped drive him to suicide.
Known as a straight shooter who helped protect his employees from Enron's cutthroat culture, Baxter tried to do the right thing, at least initially. Last spring he warned then CEO Jeff Skilling about the dubious financial practices that would eventually be Enron's undoing. By speaking out, he forfeited his chance to become company president. But this was Houston, not Hollywood, and Baxter wasn't Russell Crowe in The Insider; instead of going public with his concerns, he took his millions and walked away.
Last month he was dragged into the glare. After being named in the leaked memo written by Enron whistle-blower Sherron Watkins, Baxter was subpoenaed to testify before Congress--which meant he would have to either take the Fifth or betray friends or himself. He was also one of 29 former and current Enron officials accused in a shareholder lawsuit of cashing in options before prices started plummeting last fall; since 1998, he had cashed out $35 million in stock. The pressure was getting to him--people at his yacht club noticed that since December his hair had gone much grayer.
Late last week Baxter got into his new $80,000 Mercedes, drove to a median strip not far from his home in Sugar Land, Texas, turned the engine off, locked the doors and shot himself in the head with a single bullet from a .38 revolver. A suicide note was found, reportedly pointing to the problems at Enron.
Few at the company knew as much about those problems as Baxter, who joined Enron in 1991 and rose quickly, under the tutelage of Skilling, in the marketing wing known as Enron Capital & Trade, eventually becoming Enron's chief of strategy. He negotiated dozens of big deals, including the $3 billion purchase of the Oregon utility Portland General Electric in 1997. He was also in charge of getting rid of many of Enron's hard assets, like power plants, around the globe--part of an effort, some insiders think, to raise cash and help shore up the company's ailing balance sheet. Baxter's onetime division, Enron North America, which sold energy on the wholesale market, often did deals off the books with the company's mysterious limited partnerships like JEDI II, or Joint Energy Development Investments, which is now under investigation. By the end of 2000, his criticism of some of those deals left him in the dead-end job of vice chairman.