The Enron collapse has wiped out at least $1 billion from the retirement funds of teachers, firefighters, and other public employees, so states are joining a class-action suit to win back some of their money, the Associated Press reports.
Meanwhile, according to the AP, several other states are examining their ties to accounting firm Arthur Andersen, or weighing legal action against it.
"We owe it to these public servants to get back as much of their money as we possibly can," Ohio Attorney General Betty Montgomery said.
The losses in each state accounted for just a fraction of 1 percent of each retirement fund's value, so the retirement of individual public employees are not in danger, according to the directors of retirement funds in several states.
The money lost varies widely, $300 million in Florida retirement funds, $127 million in Georgia, $35 million in Arizona.
Rhode Island lost only $4.7 million, after wisely, or luckily, selling all its Enron stock in early August, said Treasurer Paul J. Tavares, the chairman of the state's retirement system.
The lost money, like the $103 million gone in Washington state, needs to be seen in perspective, said James Parker, director of Washington's investment board, where the fund totals $54 billion.
"When the stock market each day goes up and down a half-percent, the change is of the same magnitude," he said. "When the market goes down, OK. But when it happens this way, you want to get it back."
The AP reports that attorneys general in Georgia, Ohio and Washington state have asked a federal court in Texas to make them the lead plaintiffs in existing investors' securities fraud litigation. Others seeking to lead the class-action suit include agencies overseeing pension funds in Florida and New York City, and the university pension fund in California.
The U.S. District Court in Houston has yet to decide who will lead the suit; briefs are to be filed next week, according to Russ Willard, a spokesman for Georgia Attorney General Thurbert Baker.
An Enron spokesman in Houston did not immediately return a call seeking comment, the AP reported late last week.
To view the Associated Press article, via FindLaw, click here.
