IBEW Provides Key Testimony at Enron Hearings on Capitol Hill
February 22, 2002
At Senate Hearing on Enron and Pension Reform
IBEW members are providing key testimony as Congress investigates the devastating impact of the Enron collapse on thousands of workers.
Most recently, IBEW Local 125 member Steven E. Lacey, an employee of Enron-subsidiary Portland General Electric, testified February 7 before the U.S. Senate Committee on Health, Education, Labor & Pensions, chaired by Senator Edward M. Kennedy (D-MA).
Four members of the IBEW have now made key appearances at three separate congressional hearings since December, helping bring to public light Enrons abuse and exploitation of workers. So far, the Enron debacle has cost some 5,000 workers their jobs and wiped out some 12,000 employees 401(k) retirement savings because the company imposed a "lockdown," preventing employees from selling Enron shares as the value plummeted.
"This collapse has devastated entire families," said Lacey, an emergency repair dispatcher for PGEs Salem Division. Lacey is one of the nearly 1,000 IBEW Local 125 members at PGE who lost their retirement savings as a result of Enrons December 2001 bankruptcy. Enron purchased PGE, a small Oregon utility company, in 1997.
Lacey told the committee that Enron officers deceived loyal employees about the financial status of the company. "They lied to us kept encouraging us to hold onto our stock and never let on that our company was in serious trouble," Lacey said. "We thought we were all working together, helping to build our company and make it strong," he noted, adding that he and his IBEW co-workers often worked 20-hour shifts in sub-zero weather during power outages to restore heat and electricity to customers.
Committee Chairman Kennedy said that "above all, the Enron debacle demonstrates the urgency of reforming 401(k) plans, which are now the bedrock of Americas pension system."
Kennedy traced the deception of Enron executives in touting the stock to employees until the bitter end. "On August 14, Enron CEO Kenneth Lay told workers that he never felt better about the prospects for the company. On August 27, Lay predicted to workers a significantly higher stock price. And on September 26, Lay called Enron stock an incredible bargain. Even as they promised the moon, Lay and other executives were cashing out their stock for a billion dollars," Kennedy said.
Lacey said the suffering was unimaginable "as people watched their futures crumble each day the lockdown dragged on." Lacey said. IBEW members are joining a class-action lawsuit against Enron in which Lacey is the lead plaintiff.
The Senate hearing on "Protecting Americas Pensions: Lessons From the Enron Debacle" examined various legislative proposals for pension reform to protect U.S. workers retirement security.
"For years, Enron, like many other companies, pushed its workers to buy company stock with their own 401(k) contributions," Senator Kennedy said. "As a result, Enron workers had more than sixty percent of their 401(k) assets in Enron stock. They were turned into captive investors, who could not sell their stock when they needed to or wanted to. Workers at many of Americas leading companies face similar risks because they are over-invested in company stock."
Senators Barbara Boxer (D-CA) and Jon Corzine (D-NJ), who have introduced legislation to cap the percentage of company stock in 401(k) accounts, also testified at the hearing, as did several other Senators proposing various pension reforms. Labor Department Secretary Elaine Chao also testified.
" But we must do more to protect the retirement security of workers," Senator Kennedy concluded. "We must take concrete steps to foster the diversification of workers 401(k) plans. Companies should be required to adequately insure their pension plans and to give workers a voice in overseeing pension plans.
"We must guarantee that workers receive complete and accurate information to make their investment decisions," Kennedy said, as well as "make clear that executives cannot give workers incomplete or misleading information to affect their stock purchases."