Corporation Member in Spotlight for Enron Board Seat

The ever-expanding investigations and government probes into last fall’s surprise collapse of energy giant Enron Corp. has highlighted the role played by one member of Harvard’s Corporation in the management of the company.

Herbert S. “Pug” Winokur ’64-’65, a member of Enron’s board of directors and the chair of its finance committee, is one of seven members on Harvard’s highest governing board.

Winokur received a subpoena last month from a Senate subcommittee investigating Enron.

While lawsuits and investigations have brought to light a history of insider trading, mismanagement and misleading accounting practices by Enron, Winokur’s role remains unclear.

One of the most significant revelations is the $1.2 billion in Enron stock sold off by company insiders before the collapse last fall.

To date, no evidence has emerged that Winokur was involved in any of the massive stock sell-offs.

Enron’s filings with the Securities and Exchange Commission (SEC) in March 2000 and 2001 show Winokur owned more than 100,000 shares of Enron stock, which would have been worth between $8 and $9 million one year ago—before the value of the company’s stock plummeted to virtually nothing.

Since the March 2001 report, there have been no further reports listing Winokur’s Enron holdings—leaving the effect of the collapse on Winokur unknown.

“Short of subpoenaing [Winokur] and his stock broker, he doesn’t have an obligation to report his sales. There really is no other way to know,” said Francis Karam, a lawyer handling one of the largest lawsuits against Enron insiders.

Many of the plaintiffs in these lawsuits are businesses and unions whose employee’s retirement funds were depleted by Enron’s collapse.

Although the class action suit does not currently name Winokur, Karam said the firm is continuing to investigate.

“We will undoubtedly file an amended complaint and that will probably include the names of other defendants,” Karam said.

But Winokur is named as a defendant in a number of lawsuits filed by investors who lost money when Enron’s stock collapsed and charge the defendants with misleading investors about the company’s financial status.

Winokur’s role in Enron’s collapse as chair of the financial committee is also difficult to discern.

According to Harvard Business School professor Samuel L. Hayes, a board’s finance committee is generally in charge of approving recommendations from the company’s chief financial officer.

Hayes said this is not necessarily a sign of impropriety on Winokur’s part.