Enron Payback

It was a corporate "gotcha!" moment that seemed to have it all — longer than a perp walk, more than just a Senate hearing. Former Enron managing director Michael Kopper's guilty plea to wire fraud and money laundering appeared to promise future boons for government prosecutors, who are counting on him to incriminate his bosses, and for defrauded Enron investors, employees and pensioners, who may win back some of the ill-gotten spoils. In court documents, Kopper detailed the schemes that he says he ran with former CFO Andrew Fastow, schemes that cost the energy giant more than $1 billion. (Fastow has yet to respond.) Kopper also agreed to forfeit $12 million in illegal profits he earned, to be distributed to Enron victims. But those who lost big on Enron shouldn't celebrate yet. Responsibility for collecting the funds lies with the Securities and Exchange Commission (SEC), which was scolded by congressional investigators in July for failing to do what it's charged with now: hauling in the illegal gains of securities-law violators. From 1995 to 2001, the SEC recouped just $424 million, or 13.6% of the $3.1 billion owed in these cases, and for the last year its record dropped to 11.5%. The reason the SEC can't collect the cash? "Crooks spend it," says spokeswoman Christi Harlan. The good news is that under legislation passed in July, misled investors can also get civil penalties that once went into federal coffers. Of the $46.9 million ordered paid in civil penalties in the past year, nearly $45 million has been recovered.

Lawyers representing shell-shocked Enron employees say something is better than nothing. "The amount of money pales in comparison to the losses, but it's an important psychological victory," says Seattle attorney Steve Berman, who represents 21,000 current and former Enron employees. "They will not rest — psychologically more than pocketbook-wise — until these people pay for it."