Lou Pai

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Lou Lung Pai (Chinese: 白露龙; pinyin: Bái Lòulóng) born in Nanjing, China in 1946, is a Chinese-American businessman and former Enron executive. He was CEO of Enron Energy Services[1] and Enron Xcelerator, a venture capital division of Enron. He left Enron with over $280 million.He bought Taylor Ranch for 12 Millions.[2] Pai became the second largest land owner in Colorado when he purchased the 77,500-acre (314 km2) Taylor Ranch,[3] though he sold the property in 2005.[4]

Lou Pai has not been charged with any criminal wrongdoing in the Enron scandal and has exercised his 5th Amendment right in regard to the subsequent Enron class action lawsuit.[5] However, as a result of the lawsuit, Pai forfeited $6 million due to him from Enron's insurance policy for company officers to a fund for Enron shareholders.[6]

Accounts of the Enron scandal have frequently portrayed him as a mysterious figure;[7][8][9] a former Enron employee, interviewed in the documentary film Enron: The Smartest Guys in the Room, referred to Pai as "the invisible CEO".[10]

Background[edit]

Pai was born in Nanjing, China and came to the United States at the age of two. Pai obtained both his B.S. and M.S. in economics from the University of Maryland, College Park, where his father was a mathematics professor.[11]

His sister is Sue Pai Yang, the first Asian American appointed to be a New Jersey Workers' Compensation Judge.[12]

Enron[edit]

Skilled in math, Pai joined Enron in 1987, when it was still just a regional energy supplier. He became one of (eventual) CEO Jeffrey Skilling’s top lieutenants, primarily tasked with detailing and implementing Skilling’s vision of transforming Enron into a de facto energy-commodities-trading firm. During his Enron career, Skilling put Pai in charge of multiple Enron subsidiaries; Pai was CEO of the EES (Enron Energy Services) subsidiary from March 1997, until May 2001. The reasons for his resignation from Enron remain shrouded in mystery. [13]

Despite a reputation for being extremely introverted, taciturn, and reclusive around the office, Pai also came to symbolize the legendary lavishness and excesses of Enron’s corporate culture. Though married, Pai was known to: spend inordinate amounts of time during and after working hours in Houston-area strip clubs; use the Enron corporate jet for personal commuting; and, charge several-hundred dollars worth of lunches for himself and accompanying staff to the corporate expense account (until Chairman Ken Lay later prohibited it). [14]

Pai's frequent strip club visits led to an affair with erotic dancer [15] Melanie Fewell (who was married, herself), and resulted in a pregnancy. Upon learning of the affair, Pai’s wife filed for divorce. To satisfy the financial terms of his divorce settlement, Pai cashed-out approximately $250 million of his Enron stock -- just months before the company's stock price dramatically collapsed, and it filed for bankruptcy protection. [6] Between May 18 and June 7, 2001, Pai sold 338,897 shares of Enron stock and exercised Enron stock options that put another 572,818 shares on the open market.[6] At the time, the shares averaged $53.78 per share.[6] The reason for this sell-off of Enron stock had the fortuitous benefit of shielding Pai from the same insider trading charges leveled against other Enron executives (who had also secretly sold-off large amounts of stock, before the company’s ruinous finances were publicly known). After the divorce, Pai and Fewell married.[5]

Pai's Colorado ranchland included 14,047-foot mountain, Culebra Peak.[8] His neighbors reportedly referred to the ranch as "Mount Pai".[16]

Post-Enron[edit]

Pai is the founder and chairman of Element Markets, a renewable-energy consulting firm that has hired several former Enron senior employees.[17] Through Element, Pai has invested in pollution emissions credits.[18]

On July 30, 2008, Pai agreed to resolve civil insider trading charges against him with an out-of-court settlement of $31.5 million, including $1.5 million in civil fines and $30 million in restitution, to be deposited into a fund for shareholders harmed by Enron's bankruptcy.[6] He continues to neither admit nor deny the Securities and Exchange Commission claims that he sold millions of shares of Enron stock based on non-public information about the company's financial problems. It is one of the largest settlements in the history of the SEC's enforcement program dealing with an individual for alleged insider trading.[6] As part of the settlement, Pai is also barred from serving as an officer or director of a public company for five years.[19] [20]

Pai has three natural children (two with his ex-wife, plus one daughter with his current wife); he also is step-father to the two children from his current wife’s prior marriage. Pai and his current wife operated a business raising and training dressage horses in metropolitan Houston; but, they later moved from Sugarland, Texas, to Middleburg, Virginia’s Bolinvar area.[21]

See also[edit]

References[edit]

  1. ^ "Pai and Skilling". 2005-06-28. 
  2. ^ Johnson, Carrie (2007-03-20). "Investors Defeated In Enron Decision". Washington Post. Retrieved 2010-05-11. 
  3. ^ "Taylor Ranch sells". High Country News. 1999-08-16. 
  4. ^ "Enron: The Smartest Guys in the Room". Stylus Magazine. 2005-06-02. 
  5. ^ a b Elkind, Peter; McLean, Bethany (2006-04-03). "The luckiest people in Houston". Fortune Magazine. Retrieved 2010-05-11. 
  6. ^ a b c d e f Gordon, Marcy. "Former Enron exec paying $31.5M in SEC settlement", Associated Press, Business Week, 2008-07-30. Retrieved on 2008-07-30.
  7. ^ "Lou Pai, Enron's Elusive Mystery Man". National Public Radio. 2006-05-17. 
  8. ^ a b "The Mystery of Pai". Denver Westword. 2002-04-18. 
  9. ^ "Enron: The Smartest Guys in the Room". Stylus Magazine. 2005-06-02. 
  10. ^ "Enron: caught on camera". Accountancy Age. 2005-06-16. 
  11. ^ McLean, Bethany (2003). The Smartest Guys in the Room. Penguin Group, USA. p. 57. 
  12. ^ "Sue Pai Yang biography at International Associate of Women Judges website"
  13. ^ http://www.npr.org/templates/story/story.php?storyId=5411422.  Missing or empty |title= (help)
  14. ^ http://www.npr.org/templates/story/story.php?storyId=5411422.  Missing or empty |title= (help)
  15. ^ "Ex-Enron exec Pai target in many lawsuits". 
  16. ^ "C-SPAN Q&A : BRIAN LAMB, HOST: Bethany McLean, author". 2005-06-20. 
  17. ^ http://www.efinancialnews.com/story/2011-12-01/enron-ten-years-on-where-they-are-now.  Missing or empty |title= (help)
  18. ^ Davis, Ann (2006-11-14). "Enron veterans flourish due to 'mystique'". Accountancy Age. 
  19. ^ Reynolds, David J. and Judith Burns. Former Enron Executive Pai Agrees to Insider-Trading Settlement, Wall Street Journal, 2008-07-30. Retrieved on 2008-07-30.
  20. ^ "Ex-Enron exec Pai target in many lawsuits". 
  21. ^ http://www.efinancialnews.com/story/2011-12-01/enron-ten-years-on-where-they-are-now.  Missing or empty |title= (help)

External links[edit]