January 17, 2002
Enron Fallout in Houston
The company's scandal is taking its toll on the area's Jewish community.
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 George W. 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.
Holocaust Museum Houston was one of many local cultural institutions that benefited from Enron and the Lays' largess 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.
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, according to one Jewish leader, by making "lots of calls to Enron business associates." "She was a major source of fundraising for the museum, and now that's dried up," the Jewish leader said.
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 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.
The Lays also contributed $2,500 to the Jewish Community Center of Houston for its scholarship fund and made a one-time contribution of $50,000 to its capital campaign in 1999 .
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.
"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, said Jerry Wische, executive vice president of the JCC.