Congressional hearing gets earful from PGE employees

WASHINGTON, D.C. - Two members of Portland-based International Brotherhood of Electrical Workers (IBEW) Local 125 testified Dec. 18 before the Senate Commerce, Science and Transportation Committee.

Bob Vigil and Don Eri, longtime workers at Portland General Electric, are among nearly 1,000 members of IBEW Local 125 who are victims of Enron's November bankruptcy. Once among the most powerful companies in the United States, Houston-based Enron bought Oregon utility Portland General Electric in 1997.

"Little did those of us working hard every day to make the company successful know what was going on at the top of Enron," said 47-year-old Vigil, an electrical machinist working foreman at PGE's Pelton/Round Butte Hydroelectric Project in Central Oregon. "We trusted management's glowing reports of strong financial growth and opportunity. Then in October, Enron's house of mirrors came crashing down."

He read a list of names of PGE workers, many of whom spent 30 or more years accumulating millions of dollars in savings in accounts that today are worth a fraction of their former value.

Eri, 57 and retired since April, told the committee that PGE retirees who had Enron stock are hurting. "They don't know what the future holds now that, for some of them, a substantial portion of their retirement portfolio has simply disappeared. What they want from our country's leaders are some straight answers about what happened at Enron. Then they can make their own decisions whether there are any realistic means for trying to recover their hard-earned money." The hearing, chaired by Senator Byron Dorgan, D-ND, probed the collapse of Enron stock and its impact on stockholders, who lost an estimated $63 billion in equity.

Until late this year, Enron was the largest energy trader in the country, making investors millions while hiding losses in complicated financial statements. On the same day the federal Securities and Exchange Commission launched an investigation, employee investment accounts were frozen, leaving workers to watch the company stock value plunge to junk status.

Vigil told the committee that employees were free to make various kinds of investments in the 401(k) with their own contributions while Enron contributed stock equal in value to the cash contribution.

"The company's practice, however, has been to purchase blocks of stock at the beginning of the year, which it then used to match our contributions over the course of the year," Vigil said. "In making those contributions, Enron uses the cost of the stock when it purchased it, not the value when it makes the contributions. In good years, this certainly has been advantageous. But over the course of the last year, our employer has been contributing stock worth a fraction of the contribution it is supposed to be matching."

Enron's 401(k) plan also prohibits employees under 50 from trading the company's stock contributions. Until very recently, even after age 50, employees could trade only 25 percent of the company's contributions per year, Vigil testified.

All rank-and-file employees were barred from trading Enron stock during its slide late last year. "It seems strange to me that as soon as the really bad news came out on Enron, we found ourselves unable to move out of the stock," Vigil said. "Enron suddenly changed account managers, and our investment accounts were locked down. I have seen that Enron says we were only locked out of our accounts for 10 trading days from Oct. 29 through Nov. 12. But as early as Sept. 26, my co-workers were finding that they could get access to their accounts, but they could not conduct any transactions. As the truth about Enron started to come to light and as the officers at the top cashed out we, the employees, had no choice but to ride the stock into the ground."

"It's unconscionable that hard-working, dedicated workers were forced to sacrifice their life savings to prop up a failing company," said IBEW International President Edwin Hill. "Those who ran the company into the ground certainly aren't wiped out financially - just the workers who made their success possible."

Besides bringing congressional and public attention to the human side of Enron's collapse, IBEW members are joining class action lawsuits and pursuing grievances against the company for violating collective bargaining agreements.

Illustrating the magnitude of the overall losses, a number of PGE employees allowed Virgil to give their names, ages, years of service with PGE, and losses in Enron stock value since they were locked out of their accounts in mid-September:

1. Tim Ramsey, 55, 33 years with PGE: $995,000 loss.

2. Roy Rinard, 53, 22 years with PGE: $472,000 loss.

3. Al Kaseweter, 43, 21 years with PGE: $318,000 loss.

4. Joe and Diane Rinard, 47, 12 years with PGE: $300,000-plus loss.

5. Dave Covington, 32, 22 years with PGE: $300,000 loss.

6. Tom Klein, 55, 30 years with PGE: $188,000 loss.

7. Mike Schlenker, 41, 10 years with PGE: $177,000 loss.

8. Patti Klein, 47, 24 years with PGE: $132,000 loss.

Just these eight employees who have together invested 188 years with PGE have together lost $2,882,000.

January 4, 2002 issue

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