WASHINGTON – Sen. Phil Gramm of Texas, whose wife sits on Enron's board and audit committee, said Wednesday he had no advance warning of the company's bankruptcy or its dire financial situation.
The Republican senator added that he and his wife, Wendy, lost nearly $700,000 in compensation that had been set aside for payment to her later from an account tied to the value of Enron stock.
Wendy Gramm has been named in a lawsuit by investors against Enron executives and directors.
Gramm said he and his wife, a former head of the Commodity Futures Trading Commission, have made it a point not to discuss her business activities.
"My wife and I have had parallel careers ever since we came to Washington," he said. "When we go home, we talk about important things like Texas A&M football, me taking out the garbage, those kind of things."
Gramm said his wife sold all her Enron stock in the fall of 1998, after which the value of the company's stock soared over the next two years. Her net gain on three stock transactions was about $207,000, Gramm's office said.
Gramm said he decided to discuss his family's personal stake in Enron's situation because "any time a story has been run alleging profiteering by Enron," his wife's name and photo have generally appeared alongside it.
He said he wanted to tell the "rest of the story."
"Obviously, our loss at Enron is small as compared to some people's," he said. "I'm not complaining about it. I just wanted people to know what the facts were."
To avoid a conflict of interest with her husband's Senate work, Wendy Gramm decided to accept deferred compensation instead of Enron stock after 1998. The compensation was worth $687,000 when the company collapsed. Because of the bankruptcy filing, the plan no longer has value.
Gramm, who has received $97,350 in campaign donations from Enron since 1989, has decided to remove himself from congressional hearings focusing on what went wrong at the company. But he will take part in more general inquiries into accounting standards, investor protection issues and other matters, the senator said.
He said he would not be involved in any "Enron-specific" inquiries.
Gramm defended his wife against the criticisms that have been aimed at the energy company, saying, "she did nothing wrong."
The shareholder lawsuits allege that Enron's directors and senior executives sold $1.1 billion in Enron shares between 1998 and 2001 with inside knowledge that the company was in financial trouble.
Wendy Gramm likely will be called to testify before one of many congressional panels looking into the Enron debacle.