Police Probe Death of Ex-Enron Executive
Who Had Worked to Sell the Firm's Assets

By REBECCA SMITH, ALEXEI BARRIONUEVO and TOM HAMBURGER
Staff Reporters of THE WALL STREET JOURNAL

The former Enron Corp. executive who was found dead Friday had been engaged in the difficult task of trying to sell off assets as the company's finances started to take a turn for the worse.

Police investigators in Sugar Land, Texas, said they are continuing their investigation into the death of former Enron Vice Chairman J. Clifford Baxter, who quit the company in May before a string of negative events became public and propelled the Houston energy company into U.S. bankruptcy court last month.

Mr. Baxter was found at 2:23 a.m. Friday morning in his 2002 black Mercedes Benz with a gunshot wound to the head. The car, which police said contained a handgun, was parked in a median about a mile from Mr. Baxter's newly built home that he shared with his wife and two children in the affluent planned community of Sugar Land, about 30 miles southwest of Houston.

Police quickly put out a press release with the headline "Suicide," only later in the day changing it to read "Death Investigation." Following an autopsy, the Harris County Medical Examiner's office said Mr. Baxter's death was consistent with a suicide. But police spokeswoman Pat Whitty said Sunday that "in spite of the fact the medical examiner believes it's a suicide, we're still processing the car, gun, hair and fibers ... to ensure it was a suicide." Authorities haven't released the note.

Those who knew Mr. Baxter, who was 43 years old, expressed shock and disbelief that he should have taken his own life. A former U.S. Air Force captain and investment banker, Mr. Baxter joined Enron in 1991 and quickly became a leading dealmaker for the company, according to one person who worked closely with him. When Enron later became burdened with poorly performing assets, he was charged with helping dispose of assets, particularly ones overseas.

In that latter role, Mr. Baxter would have been privy to a wealth of information on Enron's hundreds of partnerships and special entities, through which the company pumped up profits and kept debt off its balance sheet. People close to the matter say Mr. Baxter found it difficult to sell many of these assets and was bothered by the fact so many were worth less than their book value.

Some of the partnerships that apparently came to his attention were ones in which other senior officers may have had an ownership interest. Federal investigators are looking into arrangements that involved Enron's former chief financial officer, Andrew Fastow, and possibly others, including the former corporate treasurer, Ben Glisan.

Those who knew Mr. Baxter say he regarded himself as the "integrity guy" at Enron. His name appears in a memo³ written to former Enron Chairman Kenneth Lay in August by whistle-blower Sherron Watkins warning about a potential conflict-of-interest disaster that could be awaiting the company because of the partnerships. Ms. Watkins said Mr. Baxter complained "to all who would listen."

Like others at Enron, Mr. Baxter was being sought by federal investigators who are trying to unravel Enron's complex financial arrangements. Mr. Baxter had been given legal representation, paid for by Enron, through the law firm of Swidler Berlin Shereff Friedman.

Mr. Baxter's attorney, Michael Levy, also is representing Enron's chief accounting officer, Rick Causey. Mr. Levy declined to discuss the case but instead criticized reporters and politicians for sullying Enron's name. He said the case "can only truly be understood after months of careful and deliberative investigation. Putting this kind of media spotlight on the topic doesn't help answer those questions any faster."

On Wednesday, Mr. Levy was contacted by investigators from the House Energy and Commerce Committee who requested an interview with Mr. Baxter. However, no interview date had been set. Earlier this month, Mr. Baxter also received a subpoena for Enron-related documents from a Senate Government Affairs subcommittee. It is unclear which, if any, documents he may have turned over to the panel.

Just what Mr. Baxter's mental state was prior to his death is uncertain. People who knew him said he continued to work out and spent time on his 72-foot Viking yacht, the Tranquility. He continued to do community work, notably for Junior Achievement.

Yet one friend said Mr. Baxter obviously was shaken by what happened at Enron, a company he felt he had helped build. "It wasn't unusual for Cliff to be dramatically affected by things," this person said. "That was just his way. He would obsess over details. That's why he was such a good investment banker.

"He was trying to get some distance from the situation," this person added, "but his personality wouldn't let him."

Mr. Baxter was seen as particularly close with former Enron Chief Executive Jeffrey Skilling, who plucked the one-time PaineWebber dealmaker out of Enron's Washington, D.C., office where he worked for the natural-gas side of the company. Mr. Skilling, impressed by Mr. Baxter's talent as a negotiator, brought him to Enron's Capital and Trade Resources unit -- the engine of the company's go-go growth during the 1990s.

Mr. Baxter left Enron to work at Koch Industries, a conglomerate with a heavy interest in energy, in 1995 for less than three months in the company's equities group, which was based in Wichita, Kan. But he returned to Enron and in 1998 was instrumental in the purchase of Portland General Electric, an Oregon utility. This was supposed to have been Enron's springboard into the Western power market, especially California, which had just been deregulated. But the plan never panned out, and Mr. Baxter soon found himself looking for a buyer for Portland General.

On Friday, four policemen stood guard on the steps of Mr. Baxter's red brick house in Sugar Land, a town named for the cane fields it once contained. They turned away reporters seeking comment from Mrs. Baxter and family friends on hand.

Neighbors said the Baxters kept pretty much to themselves and often were away.

Mr. Baxter spent most weekends on his motorboat and one neighbor said the family spent most of last summer cruising the Caribbean, arriving back home just a few days before school started for Mr. Baxter's fifth-grade daughter and high-school-aged son. "When he retired, we figured we would see a lot more of him," said Tom Swonke, a next-door neighbor. "But we didn't."

After the scandal broke, one Enron official pointed out, Mr. Baxter would sometimes chat with Mr. Skilling and others he had worked with, and they buoyed each other's spirits. But those conversations evidently became less frequent when attorneys advised senior Enron executives facing potential class-action lawsuits and criminal inquiries that they shouldn't be in contact any longer.

One person who was close with Mr. Baxter at Enron noted he had seemed "in pretty good shape the last time I talked to him," a few days before his death. Still, this person said, Mr. Baxter had lamented of late: "This is all going to have a really bad ending