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Enron Scandal Poses Challenge for Houston Jewish Community

January 16, 2002
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The Enron Corporation and Linda Lay, the wife of its chairman and chief executive, have donated hundreds of thousands of dollars to Houston’s Holocaust museum, accounting for approximately 10 percent of the institution’s $3 million budget.

Now enmeshed in scandal and bankruptcy, Kenneth and Linda Lay were to be among the honorary co-chairs at the museum’s annual dinner this March, sharing the title with various dignitaries, including President Bush.

The energy company, which filed for bankruptcy protection last month after acknowledging it had overstated its profits by nearly $600 million, is at the center of a scandal in which it is accused of lying to investors and abusing its vast political clout.

Enron’s collapse and the ensuing scandal are threatening the entire economy of Houston, and its effects are being felt by local Jewish institutions — particularly the Holocaust museum — and some of the city’s 45,000 Jews who worked for the company.

Holocaust Museum Houston was one of many local cultural institutions that benefited from Enron and the Lays’ largesse and whose future — presumably without their assistance — is uncertain.

Although neither of the Lays are Jewish, Linda Lay — who is on the museum’s board — grew up with many Jewish friends and sometimes attended synagogue with them, said Steven Johnson, a spokesman for the museum.

“She really believes in her heart about celebrating diversity, being aware of the dangers of hatred and prejudice,” he said.

In 2000, Linda Lay was honored with the museum’s “Guardian of the Human Spirit” award, given to an individual “who has reached beyond the ordinary in an effort to better humanity.”

The Lays and Enron each regularly purchased $100,000 tables at the museum’s annual dinner, and Enron was the $100,000 corporate patron of The Human Race, an annual “fun run” the museum sponsors to celebrate diversity, Johnson said.

In addition to the couple’s donations, Linda Lay reportedly raised the lion’s share of revenue for the museum’s annual dinner, raising a significant amount of money, according to one Jewish leader, by making “lots of calls to Enron business associates.”

“She was a major source of fund raising for the museum, and now that’s dried up,” the Jewish leader said. “Now there’s no one for her to contact.”

While the money from Enron “seems to be through,” Johnson said Lay remains on the board and the museum is “hopeful that Linda Lay and her involvement will continue, and that we’ll continue to receive some funding from her personally.”

Asked whether some might find it unseemly for someone linked to a major scandal to serve in such a prominent role, Johnson said that while “things could change,” there has been no discussion of that issue yet.

“Our involvement is predominantly with Mrs. Lay and not Mr. Lay, and she doesn’t work for Enron and hasn’t had anything to do with what’s going on,” he said.

“We don’t know about Enron’s business dealings,” Johnson said. “We strictly were a charity they supported.”

The Lays also contributed $2,500 to the Jewish Community Center of Houston for its scholarship fund, made a one- time contribution of $50,000 to its capital campaign in 1999 and occasionally contributed to the Jewish Federation of Greater Houston when invited to benefits.

Top professionals with the federation and JCC acknowledge that the Enron scandal is taking a toll on the Jewish community, but say Enron had a relatively minor role as a donor to Jewish causes or an employer of Jews.

So far, local Jewish agencies are not experiencing a surge in demand for services from people who lost their jobs or retirement money as a result of the Enron bankruptcy.

“We’ve had very few if any individuals that have lost their retirement assets approach Jewish institutions for help,” said Lee Wunsch, executive vice president of the Jewish Federation of Greater Houston.

However, he said he is personally aware of a few people who are “struggling.”

“People in their late 50s that had accumulated retirement assets and saw most of it disappear are having to face the reality that they’re going to have to keep working and restart their retirement planning,” he said.

Wunsch, executive vice president of the Jewish Federation of Greater Houston, said the federation has “lost very modest support” as a result of the Enron situation, but did not elaborate.

“Some of our donors were getting matching gifts from Enron. We’ve lost that,” he said.

One Jewish leader who asked not to be identified said he lost more than $50,000 in Enron investments.

“From what I know, none of the leaders of the Jewish community were involved directly in the Enron debacle, but a lot of Jews were employed there, or were shareholders,” the Jewish leader said.

Enron employed a “lot of accountants, lawyers, senior executives, lots of skilled educated people — a lot of Jews were part of that,” he said.

Jerry Wische, executive vice president of the JCC, said some of the center’s members have lost jobs at Enron, but he did not yet know how many.

“We’re encouraging all the Enron employees who are JCC members to come talk to us about financial aid if they need to or if they are considering not continuing their membership” due to Enron-related financial losses, Wische said.

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