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Lou Pai

Summary

Lou Lung Pai (Chinese: 白露龍; pinyin: Bái Lòulóng) (born 23 June 1947) is a Chinese-American businessman and former Enron executive. He was CEO of Enron subsidiaries Enron Energy Services[5] and Enron Xcelerator, a venture capital division.[2] He left Enron with over $250 million. Pai was the second-largest land owner in Colorado after he purchased the 77,500-acre (314 km2) Taylor Ranch[6] for $23 million in 1999,[7] though he sold the property in June 2004 for $60 million.[8]

Lou Pai
白露龍
Born (1947-06-23) June 23, 1947 (age 76)
Nanjing, Republic of China
NationalityAmerican
EducationUniversity of Maryland, College Park (BS, MS) [1]
OccupationBusiness executive
Employers
Spouses
  • Lanna Lee (1976–2000)[3][4]
  • Melanie Fewell (2001–present)
Children3

Pai was not charged with any criminal wrongdoing in the Enron scandal and exercised his Fifth Amendment rights in regard to the subsequent Enron class action lawsuits.[9] 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.[10][11]

Accounts of the Enron scandal have frequently portrayed him as a mysterious figure;[12][13][14] a former Enron employee, interviewed in the 2005 documentary film Enron: The Smartest Guys in the Room, referred to Pai as "the invisible CEO".[15]

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,[2] where his father, Shih-I Pai, was an aeronautics professor.[16][17] Pai worked for the federal government, primarily at the U.S. Securities and Exchange Commission, in the 1970s before joining Enron.[4]

His sister is Sue Pai Yang,[17] the first Asian American appointed to be a New Jersey Workers' Compensation judge.[18]

Enron edit

Pai joined Enron in 1987, when it was 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.[12]

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.[12]

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.[2][10] At the time, the price averaged $53.78 per share.[10] This early sell-off of Enron stock had the benefit of shielding Pai from the 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.

Pai's Colorado ranchland included the 14,047-foot mountain Culebra Peak.[13] His neighbors reportedly referred to the ranch as "Mount Pai".[19]

Post-Enron edit

Pai was a founder and is a former chairman of Element Markets, a renewable-energy consulting firm.[20] Through Element, Pai has invested in pollution emissions credits.[21][22] Since then, Pai has emerged as a partner in Midstream Capital Partners LLC.[23]

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.[10] 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.[10] As part of the settlement, Pai was also barred from serving as an officer or director of a public company for five years.[11][24][25]

Personal life edit

Pai's frequent strip club visits during his time with Enron led to an affair with stripper[24] Melanie Fewell (who was also married), and resulted in a pregnancy. Upon learning of the affair, Pai's then-wife of over 20 years, Lanna Lee, with whom he has two biological children, filed for divorce.[3] To satisfy the financial terms of his divorce settlement, Pai cashed out approximately $250 million of his Enron stock[24] just months before the company's stock price dramatically collapsed and it filed for bankruptcy protection.[10] After the divorce, Pai and Fewell married.[9]

Pai and Fewell together operated Canaan Ranch, located near metropolitan Houston, where they raised and trained dressage horses.[20][26][27] They later moved from Sugar Land, Texas, to Middleburg, Virginia, and opened a second Canaan Ranch there,[28] but, as of 2014, it is up for sale. More recently, Pai and his family have moved to Wellington, Florida.[29][30]

See also edit

References edit

  1. ^ "United States Securities and Exchange Commission v. Lou L. Pai, Civil Action NoH-08-CV-2338" (PDF).
  2. ^ a b c d Mejia, Luis R. (29 July 2008). "United States Securities and Exchange Commission v. Lou L. Pai, Civil Action No. H-08-CV-2338 [Complaint]" (PDF). SEC. Retrieved 8 January 2015.
  3. ^ a b L Lee v. Hasson, 286 S.W.3d 1 (Tex. App. 2007).
  4. ^ a b Prendergast, Alan (2002-04-18). "Crouching Greed, Hidden Losses". Denver Westword. Retrieved 8 January 2015.
  5. ^ Kosty, Jeff (28 June 2005). "Pai and Skilling". enronblog. Archived from the original on 7 May 2006. Retrieved 8 January 2015.
  6. ^ Solberg, Dustin (1999-08-16). "Taylor Ranch sells". High Country News. Retrieved 8 January 2015.
  7. ^ "CULEBRA PEAK". 2014-06-17. Retrieved 2014-08-11.
  8. ^ Curtin, Dave (8 August 2005). "Home again, but it's changed". Denver Post. Retrieved 8 January 2015.
  9. ^ a b Elkind, Peter; McLean, Bethany (2006-04-03). "The luckiest people in Houston". Fortune Magazine. Retrieved 2010-05-11.
  10. ^ a b c d e f Gordon, Marcy (29 July 2008). "Ex-Enron exec to pay $31.5 million". The Press Democrat. Sonoma County, California. Associated Press. Retrieved 8 January 2015.
  11. ^ a b "U.S. Securities and Exchange Commission v. Lou L. Pai, Civil Action No. H-08-2338 (SDTX)" (Press release). Securities and Exchange Commission. 29 July 2008. Retrieved 8 January 2015.
  12. ^ a b c Brand, Madeleine (2006-05-17). "Lou Pai, Enron's Elusive Mystery Man". National Public Radio. Retrieved 8 January 2015.
  13. ^ a b Prendergast, Alan (2002-04-18). "The Mystery of Pai". Denver Westword. Archived from the original on 2009-01-30. Retrieved 8 January 2015.
  14. ^ Somerville, Patrick (2005-06-02). "Enron: The Smartest Guys in the Room". Nick's Flick Picks.
  15. ^ Bennett, James (2005-06-16). "Enron: caught on camera". Accountancy Age. Archived from the original on 2010-01-22. Retrieved 8 January 2015.
  16. ^ McLean, Bethany (2003). The Smartest Guys in the Room. Penguin Group, USA. p. 57.
  17. ^ a b Saxon, Wolfgang (10 June 1996). "Dr. Shih-I Pai, 82, Researcher Who Advanced Aerodynamics". The New York Times. Retrieved 8 January 2015.
  18. ^ "Who We Are: Board of Directors: Hon. Sue Pai Yang". International Association of Women Judges. Archived from the original on 15 January 2012. Retrieved 8 January 2015.
  19. ^ "Q&A with Bethany McLean". C-SPAN. 2005-06-20. Retrieved 8 January 2015.
  20. ^ a b Partington, Richard (1 December 2011). "The Enron cast: Where are they now?". Financial News. Retrieved 8 January 2015.(subscription required)
  21. ^ Davis, Ann (2006-11-14). "Enron veterans flourish due to 'mystique'". Pittsburgh Post-Gazette. Retrieved 8 January 2015.
  22. ^ Fallows, James (28 March 2009). "Update on Xobni, Lou Pai (updated!)". The Atlantic. Retrieved 8 January 2015.
  23. ^ Poole, Claire (6 February 2013). "Ex-Enron executives form Midstream Capital". The Deal Pipeline. Archived from the original on 2015-01-09. Retrieved 8 January 2015.
  24. ^ a b c Bernstein, Alan (3 March 2002). "Ex-Enron exec Pai target in many lawsuits". Houston Chronicle. Retrieved 8 January 2015.
  25. ^ Reynolds, David J.; Burns, Judith (2008-07-30). "Former Enron Executive Pai Agrees to Insider-Trading Settlement". Wall Street Journal. Retrieved 2008-07-30.(subscription required)
  26. ^ "Canaan Ranch: Meet our Staff". Canaan Ranch. 2009. Archived from the original on 29 April 2015. Retrieved 8 January 2015.
  27. ^ Murphy, Kate (29 January 2006). "10 Enron Players: Where They Landed After the Fall—Lou Lung Pai: A Big Stock Seller, With a Taste for Glitter". The New York Times. Retrieved 8 January 2015.
  28. ^ Westmark, Jan (9 May 2012). "Christy Raisbeck And Fernando Win Horse Of Course High Score Award At Houston Dressage Society Spring Classic I Show". Horses Daily. Retrieved 13 June 2016.
  29. ^ [1] [2] Archived 2016-05-12 at the Wayback Machine [3]
  30. ^ some more information on Canaan Ranch: [4] Archived 2015-04-23 at the Wayback Machine [5] Archived 2015-01-09 at the Wayback Machine [6] Archived 2015-01-09 at the Wayback Machine

External links edit

  • Information from CORPWATCH on Lou Pai

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