The rise and fall of an Enron executive

By DAVID RANDALL

HOUSTON - Palm Royale Boulevard is not the kind of street where you expect to see fancy sedans parked up at two in the morning.

The tree-lined road runs through Sugar Land, one of Houston's snazzier suburbs. Everyone has off-street parking here, especially if they own a new Mercedes like the one the patrolling officer could see by the kerb with its lights out.

As he got closer he could make out a figure in the driver's seat. He tried the door, but it was locked.

It was only when he broke the window that he discovered the body of J. Clifford Baxter, a graduate of Columbia Business School, former Enron executive, and now the very recently dead repository of knowledge about what really happened in the biggest corporate scandal in history.

He had been shot in the head. Once. Beside him lay a gun and a note. We now know the gun was a .38 calibre revolver.

ABC television, quoting sources close to the investigation, says the note referred to Enron and the pressures that were piling up on this happily married, 43-year-old father of two and that built up in his mind until the one way he could see out of it all was to put a bullet in his head.

And the pressures were considerable. The company he used to work for had become the biggest-ever corporate bankruptcy, and revelations were coming daily about how its directors, Baxter among them, had hidden losses overseas while selling shares for hundreds of millions of dollars.

Baxter, concerned about all this, had spoken out at Enron, and then left the firm suddenly last May. And congressional investigations were under way. Officials wanted to speak to Baxter and see documents he had. He knew an awful lot.

That is why, according to colleagues, he was worried. He had briefed lawyers and, according to Jerry Mutchlen, president of the charity Junior Achievement of Texas, where Baxter sat on the board, "was depressed and disappointed about all that had happened".

Another former business associate went further. Baxter, he said, broke down in tears during a phone call last week. He was even, the businessman added, "talking about perhaps needing a bodyguard". After all, he knew a lot. Maybe more than anyone imagined. Until Enron imploded, Clifford Baxter seemed to be a man who had it made; more than $NZ66 million made, in fact, from selling Enron shares alone.

He lived with wife Carol Whalen in a $1.6 million home in Sweetwater, much the toniest part of Sugar Land, had a son of 16 and an 11-year-old daughter, and was wealthy enough to fund a charitable foundation named after him and his wife. It gave to causes such as a local Catholic church and the Republican Party.

He also had a 22m yacht, Tranquillity Base, on which he had spent much time since leaving Enron. He seemed, according to Ross Tuckwiller, general manager of the Houston Yacht Club, happy there.

But he also knew a lot. Maybe that was why, friends say, he was planning to buy a faster boat and use it to travel.

It must have all seemed a far cry from the day in 1991 when the holder of a Columbia masters degree in business administration (top of the class of '87), then aged 32, joined a small energy company called Enron.

As it grew into one of the largest corporations in America, Baxter rose quickly, becoming chairman and chief executive of Enron North America before being named chief strategy officer for Enron Corporation in June 2000 and then vice-president the following October.

He was an aggressive and sometimes successful deal-maker, but he also led the acquisitions that became two of Enron's costliest errors: the purchases of Portland General Electric and Wessex Water.

According to colleagues, he worked hard and played hard, taking his family to Disney World every year. Enron president Jeff Skilling said he was well liked for "his sense of humour and straightforward manner".

Skilling was an expert on Baxter's straight-talking. After all, according to a memo Enron whistleblower Sherron Watkins sent to Kenneth Lay, the company boss, Baxter "complained mightily to Skilling and all who would listen about the inappropriateness of our transactions". She knew he knew a lot.

By the time Watkins wrote her memo Baxter had been gone from Enron's fulltime employ for three months.

But although it was now his yacht and family that saw most of him, he had not left Enron completely. Contrary to initial reports, Baxter had been retained as a consultant and his Enron pass was found on his body at the weekend.

His death was relayed to Enron employees in a four-line email that made no mention of suicide.

His lawyers were also informed. On the morning of his death they had been negotiating with congressional officials over their request to speak to him, see his documents and, possibly, have him formally give evidence to the hearings now under way.

Representative James Greenwood, chairman of the House energy and commerce committee, said: "It seemed to us that he was a pretty highly placed insider at Enron who had understood exactly what was wrong there."

But we won't know now what Baxter knew. Along with the documents shredded by the auditors from Andersen, the testimony of Baxter will remain one of the untold mysteries of the Enron affair, however far into the recesses of President George W. Bush's Administration and corporate America it eventually reaches.

But Baxter's documents may yet speak for him, and the FBI is now investigating his death. The real smoking gun on the seat of the Mercedes parked on Palm Royale Boulevard may yet prove to be Baxter himself.

- INDEPENDENT