Tuesday, January 29, 2002

Poverty is not for sissies

In an exceptionally cheesy display — even in this cheesy day and age — the wife of former Enron chairman Kenneth Lay wept on camera. The possibility exists, according to Linda Lay, that the collapse of her husband's company may have a deleterious effect on their retirement plans. “We are fighting for liquidity,” she told NBC's Lisa Myers on Monday. Surely this is a battle they can win.

        In 1999, Mr. Lay showed a profit of more than $44 million on stock options. In 2000, sale of options brought him $123 million, and another $26 million in 2001, according to Bloomberg News. If they didn't manage to keep any of that, well, I don't want to make Mrs. Lay cry again. But I don't think they are very good with money.

Maybe a pawn shop

        She admits they are on the ropes. “Virtually — other than the home we live in — everything we own is for sale.” Plenty of people nearing retirement use the equity in their house to make the difference between pinching pennies and pinching nickels. Maybe the Lays could relocate on a bus line and sell their automobiles. Unless they don't own their cars.

        The compensation package for Mr. Lay, who resigned last week, was $18.3 million in 2000. And it has been my experience that the more money people make, the less they want to actually pay for anything themselves. So their cars are probably leased, probably by the company.

        Still, there must be something these people could do. I wonder if Houston has any good pawn shops, which is where a lot of folks who are down on their luck “get liquid.” My good friend Eugene Spiegel, proprietor of Reliable Jewelry & Loan on Vine Street, downtown, says he pays 16 cents on the dollar for used jewelry, which is a better deal than Enron employees got for the stock in their 401(k) accounts. “Maybe the Lays have some nice silverware,” he said helpfully. “I'll give them $3 or $4 an ounce for that.” He also would be willing to help Mrs. Lay liquidate her big-screen TV, if she has one, and he will give her top dollar for mountain bikes and cameras.

Curiously uninformed

        Linda Lay could sell her inaugural ball gown. Surely she has one. She and her husband coughed up $100,000 for the Presidential Inaugural Gala. The Snooty Fox pays about one-third of retail for gently used clothing. And I'll bet the grieving nouveau poor Mrs. Lay wishes she could get her hands on the $10,000 she and her husband donated to the Bush presidential recount fund. Or the $122,500 they contributed to Texas gubernatorial races in support of both George W. Bush and Democrat Ann Richards.

        “We've lost everything,” Linda Lay said. But she doesn't blame her husband, who apparently was curiously uninformed. “He had to run a huge, big company. He can't do everyone's job for them. Some things he wasn't told.”

        On Dec. 2, Enron filed for Chapter 11 bankruptcy protection, wiping out an estimated $60 billion of stockholder investment and about $1.3 billion of employee retirement savings. Enron officials have acknowledged the company has overstated its profits by more than $580 million since 1997. Documents have been shredded.

        Mrs. Lay described her husband as an “honest, decent, moral human being.” But his employees were not depending on him to be their spiritual adviser. I think they were just hoping he might be good with money.

        E-mail lpulfer@enquirer.com. Past columns at Enquirer.com/columns/pulfer.


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