Business 2004: The losers
Some of the newsmakers in business who struggled in 2004:
Kenneth Lay
Since his indictment in July, the Enron Corp. founder’s energies have been spent denying culpability for the company’s collapse to just about anyone who will listen — newspapers, Larry King, even his high school classmates. Three years after the scandal broke, causing more than 5,000 at Enron to lose their jobs and many to lose most of their retirement nesteggs, prosecutors this year indicted Lay for allegedly participating in a conspiracy to conceal the energy trader’s tailspin. According to prosecutors, Lay knew of Enron’s problems in 2001 — including a massive upcoming quarterly loss and $1.2 billion write-down in shareholder equity — but continued to tout the company to the public. He even encouraged employees to buy more Enron stock.
Martha Stewart
She sure lived up to her “Omnimedia” billing this year. Images of Martha leaving a Manhattan courtroom after her felony conviction, wearing a fur stole and a furrowed brow, were perhaps the year’s most widely published pictures not taken at Abu Ghraib. Stewart is doing her homemaking at a hoosegow in West Virginia these days, but don’t waste any time crying into your crepes for her. The stock chart for Martha Stewart Living Omnimedia Inc. looks like a crooked smile since the scandal hit. It dipped sharply at first, stayed down awhile, then shot back to a three-year high recently as closure came to the scandal and news broke that Sears was being acquired by Kmart, the biggest hawker of her goods. And don’t be surprised if she makes a triumphant return to the winners list in 2005 if her new television show is a hit. No, not on HBO’s “Oz,” but on her own cooking and homemaking show to be syndicated by Mark Burnett Productions and NBC Universal Domestic Television.
Mikhail Khodorkovsky
He was once riding high as Russia’s richest man, with a net worth estimated by Forbes at $15 billion. But the young, dapper oil tycoon was brought down by Russian leader Vladimir Putin, who jailed the 41-year-old Khodorkovsky and put his Yukos petroleum empire under a microscope this year for alleged tax evasion. But his supporters say it’s all politics, comrade — Khodorkovsky was a big supporter of parties opposing Putin’s in the 2003 parliamentary elections.
Jeffrey W. Greenberg
Do you think he had scandal insurance? The chairman and CEO of Marsh & McLennan Cos., the nation’s largest insurance broker, was bounced from his job after New York Attorney General Eliot Spitzer launched a probe of bid rigging between insurance firms and brokers. Marsh is typing up 3,000 pink slips as it deals with the scandal. Jeffrey’s father Hank and his brother Evan, both of whom also head insurance companies, have so-far managed to weather the scandal with their jobs intact, though dad’s company, American International Group Inc., has to pay $126 million to the SEC as settlement for a separate charge of aiding other companies in accounting fraud. It’s a safe bet that there have been happier holidays for the Greenberg family.
Bernie Ebbers
Federal prosecutors this March charged Ebbers as the leader of an $11 billion accounting fraud case at WorldCom, which collapsed in the largest corporate bankruptcy case ever in 2002. The feds say he and former WorldCom chief financial officer Scott Sullivan led an effort to inflate profits and hide expenses in order for the long-distance provider to meet earnings targets. Ebbers is free on bail while he awaits trial, but the judge has confined him to only the states of New York, Mississippi, Louisiana and Washington, D.C. Anywhere else, he can call long distance.