Two of the Enron executives who testified before Greenwood's subcommittee on Thursday are among those who received the generous gifts -- McMahon, who received $1.5 million, and vice president and general counsel for corporate development Jordan Mintz, who received $200,000.

Enron spokesman Mark Palmer has defended the bonuses as standard operating procedure when a company is trying to retain its talent. The documents show that Palmer's own bonus was $200,000. He did not return a Friday call from Salon.

Relying on an in-house e-mail that broadly described the bonuses, the Houston Chronicle reported in December that 11 Enron executives received one-quarter of the retention bonuses. The e-mail listed McMahon; president and chief executive of Enron Americas John Lavorato, slated for $5 million; chief operating officer of Enron Americas Louise Kitchen, who received $2 million; and president and chief executive of Enron Broadband Services Jim Fallon, who like McMahon received $1.5 million. Approximately 500 employees were included on the bonus list and their rewards ranged from $2,000 to $5 million apiece.

If the company's strategy was indeed to retain these employees, it often failed to achieve its objective. Those who received bonuses agreed to stay with Enron only until the end of February 2002. One former Enron executive reported that "a lot of these people who took the money and signed the contracts have either already left the company -- keeping the money -- or have done nothing but look for and secure their next job when their contract runs out. A number of them have been traveling on Enron's expense accounts negotiating their next job."

John Nowlan, who received a $500,000 retention bonus, has already negotiated a deal to take his crude/products trading team to Transammonia, Inc. Gary Hickerson, who received $600,000 for his "retention," has, according to sources, been working on developing his own private equity fund. Neither Nowlan nor Hickerson returned calls for comment. Based on a conversation with Nowlan's assistant, it wasn't clear that Nowlan still worked at Enron.

Nor did the $5 million bonus that Enron lavished on John Lavorato or the $2 million awarded Louise Kitchen secure their services. Lavorato and Kitchen are following Enron's energy-trading component, Enron Americas, to its new corporate owner, UBS Warburg. Some Enron insiders argue that since Enron Americas was a valuable commodity it could sell, thus helping the firm to stay alive, it was important to keep Lavorato and Kitchen during the transition. But the size of their bonuses has raised eyebrows.

On Thursday McMahon defended the bonuses. "The notion behind the retention payments," he said, "was one that if we were to go into bankruptcy, that these key individuals would remain in the company to protect the businesses' and assets' value for the creditors."

But their performance during Enron's meltdown casts doubt on some of these executives' managerial worth. Mark Haedicke, an attorney with Enron North America, is described in the Powers Report as sitting back and doing nothing when alarms were sounded about the controversial shell partnerships blamed for the company's implosion.

Haedicke and ENA's other senior attorney were warned about the problem in a memo written by employee Stuart Zisman, who stated: "We have discovered that a majority of the investments being introduced into the Raptor Structure are bad ones. This is disconcerting [because] ... it might lead one to believe that the financial books at Enron are being 'cooked' in order to eliminate a drag on earnings that would otherwise occur under fair value accounting."

Zisman then met with Haedicke and the other senior attorney to discuss his concerns. But the two "believed the assertion in Zisman's memo to be untrue, so they did not take any further action," according to the Powers Report. Despite this nonchalance, Haedicke was compensated with $750,000 in bonuses last November. Haedicke is also about to leave Enron to work for UBS.

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