A brief brush with Enron: I remember thinking, 'I just don't understand how this company works.'.

ALMOST UNNOTICED in all the excitement when the White House changes hands from one party to the other is the operation of an iron law of politics: For each high-spirited newcomer, one weary officeholder from the outgoing administration is packing files and memories in cardboard boxes, saying goodbye to colleagues and power, and looking for a new job. In late 1992, one of those weary officeholders was me.

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I would soon be 63, and my first project would be to repair the family finances. I had spent my prime years, so far at least, on a government payroll. My wife, Susan, and I were certainly well off when we came to Washington in 1981, but not, contrary to popular belief, extremely wealthy. Over 12 years, we had seriously tapped our family savings to pay living expenses and educate children.

Offers came almost immediately. They always do for high public officials who leave office. Multinational banks, major law firms, and Fortune 500 companies today operate in global markets, subject to the laws, regulations, and taxes of many nations, and vulnerable to disruptions--some swift, others slow-moving--in their economic and geopolitical environments. Cabinet officers and other top officials generally have useful experiences in steering through those heavy currents.

When the right opportunity finally knocked, fortunately, I found Bill Barnett of Houston on the other side of the door. We had met at the University of Texas School of Law in the mid-1950s. Now, more than 35 years later, Bill was one of the first visitors to my White House office after the November election. Thanks to his talent, hard work, and integrity, he was one of the most highly respected attorneys in Houston. More to the point, he was also managing partner of the law firm, today known as Baker Botts, that my great-grandfather James Addison Baker had helped build more than a century earlier. Bill proposed that I enter the firm all these years later as senior partner.

I told Bill I would not lobby, draft legal documents, handle routine business negotiations, or serve on the management committee. "I have managed everything I ever want to manage," I said. No problem, Bill replied. My role would be that of a graybeard, a special resource, an adviser to the firm and its clients on big or unique problems.

There is a tradition among big law firms of supplying candidates as directors for important clients, and I agreed to serve on the boards of two public companies. Why so few? Because being a director of a public corporation today is time-consuming work and carries weighty responsibilities. Too many former public figures overload themselves with board appointments, and I did not want to make that mistake. I no longer serve on the two boards I accepted, but to this day I am still fending off a lawsuit in which I am a defendant just by virtue of once having been a board member. This is something that, unfortunately, goes with the territory in today's highly litigious society.

Another financial opportunity was the Carlyle Group, now one of the world's largest private equity firms. I agreed to become senior counselor to Carlyle, a post I held until my retirement in April 2005 at age 75. As with Baker Botts, I set boundaries, particularly about lobbying, and I refused to solicit funds directly from potential investors. Typically I would be asked to speak to groups invited by Carlyle--usually at an overseas conference, sometimes in the United States--about economic, political, or geopolitical issues.

Despite my general reluctance to serve on corporate boards, I made an exception in 2001 for the privately held King Ranch, a Texas legend.

At first I declined. "I don't do boards," I said when Julia Jitkoff first approached me. Julia is a longtime friend, a talented painter and sculptor, a descendant of the ranch's founder, Captain Richard King, and--as I soon learned--a gifted recruiter.

"Would it make any difference if I told you that directors have the same rights to hunt on the ranch that family members do?" she replied.

Asking a hunter if he would enjoy access to the King Ranch is like asking an art lover if he wants a key to the Metropolitan Museum. At almost 900,000 acres, the ranch is larger than Rhode Island. The experience of hunting there is as close as possible to what Spanish and Anglo pioneers might have enjoyed centuries ago, and Native Americans before that.

"Where do I sign up?" I asked.

I also agreed over the years to serve on a number of nonprofit boards. Princeton University, my alma mater, and Rice University invited me to serve as trustee. (I would be the second James A. Baker on the Rice board, after my grandfather, Captain Baker.) I have also served on boards or held honorary positions at Howard Hughes Medical Institute in Chevy Chase, Md., and St. Luke's Hospital and the M.D. Anderson Cancer Center in Houston.

An underwhelming experience

Early on, I also signed up--briefly--with Enron, but not as a board member. It was the hottest energy company in town, perhaps in the country, when I returned to Houston, and Ken Lay recruited Bob Mosbacher and me as consultants. Susan thought it was a really bad idea, but after 13 full years and three part-time years in politics and public service, we needed to make some money, so I accepted anyway. I helped write a few reports and occasionally met with company officers about international projects they were trying to win.

It was an underwhelming experience. I remember telling both Susan and Mosbacher after about six months, "I just don't understand how this company works." What threw me was seeing the present value of a long-term power contract posted as current earnings when the contract was signed and before either party had even begun to perform. "It doesn't seem to me there's any way to grow the company except to keep putting these kinds of deals on the books," I said. Another problem was that corporate executives won big bonuses by signing these contracts, regardless of whether the transactions were good or bad for the company.

My misgivings never crystallized into a clear understanding of the troubles that lay ahead, much less their magnitude. Still, I was not unhappy when my relationship with Enron ended by mutual agreement after two years, in February 1995.

James A. Baker III served as chief of staff to Ronald Reagan and George H.W. Bush and is currently a senior partner in the law firm of Baker Botts. From Work Hard, Study ... and Keep Out of Politics! by James A. Baker III. Reprinted by arrangement with G.P. Putnam's Sons, a member of Penguin Group (USA) Inc. (www.penguingroup.com). Copyright 2006 by James A. Baker III.