Former Enron vice chairman J. Clifford Baxter
Baxter, who left Enron last May for the same official reasons Jeff Skilling did in August — "to spend more time with his family" — had complained internally to fellow execs about the company's risky accounting practices, and was mentioned prominently in Sherron Watkins' fiery letter to then-CEO Ken Lay. In other words, it's likely Baxter not only knew about Enron's bad bookkeeping habits, but whose idea they were, who kept them hidden and who, by extension, might deserve to go to jail when Congress, the SEC and the Justice Department finish their scrutiny of the affair.
And now he's dead — with an Enron ID still in his pocket eight months into retirement — and he'll tell no tales. Meanwhile, congressional hearings-holders, having debuted in unimpressive fashion Thursday with Arthur Andersen auditor David Duncan taking the Fifth in the House and former SEC Arthur Levitt wearily reciting to the Senate what he'd told them two years ago about conflicts of interest in the financial system, took the day off Friday to update TV news channels on the state of the scandal. The subpoenas are in the mail and the show will only get better, but for now lawmakers have a lot more burning questions than they have witnesses to answer them.
And so, with a brief stopover in Sugar Land that will surely yield some titillating follow-ups, the Enron scandal turned back toward whence it came — Wall Street. The Wall Street Journal led Friday with a story that everyone might have been talking about if anyone could understand it — how investment bank JP Morgan held Enron's hand all the way to the Jersey Channel Islands to set up one of the company's offshore partnerships/tax havens/accounting dodges — and could stand to lose $1 billion on the deal. Implication: That something rotten you're smelling in the state of business is probably not confined to a few evildoers in Houston — and the race is now on to be as non-Enron-like as possible.
Kmart proved that point Friday when it instigated — on the slight evidence of a Watkins-style letter from a downsized employee complaining of funny accounting at the now-bankrupt retailer — an internal investigation into its own books (by an outside auditor) and even forwarded the letter to the SEC. House members scared of their own coffers have forced campaign finance reform back onto the agenda. And Wall Street investors are suddenly very interested in old-fashioned notions like "cash flow" and "core business."
And so the Enron saga goes on, idling in something like neutral for now while the tidbits and hints of intrigue continue to pile up in the wings. And the death of Cliff Baxter may well prove totemic by the time it's all said and done — there's so much we don't know, and so many who didn't want us to know it, that if lawmakers expend all their energy chasing the ghosts of Enron instead of cleaning up the laws involved, it may find that after all the sound and fury they've learned little and cured less.