Early Tuesday afternoon, as the weatherman called for yet another round of thunderboomers, a crowd of anxious Texans poured into the huge convention center in downtown Houston.

They weren't seeking shelter. Rather, they were shuffling toward the very eye of a powerful storm that threatened to rock faraway Wall Street. These were the jurors called to pass judgment on pipeline giant El Paso ( EP) in a cavernous makeshift courtroom. The air was charged with emotion.

And then, it seems, the storm passed. When the smoke cleared Tuesday afternoon in Wall Street's biggest corporate governance showdown this season, El Paso management was still standing. The dissident slate led by big El Paso shareholder Selim Zilkha had fallen just short of toppling the energy merchant's board.

The setback for the well-financed, highly organized El Paso opponents underscores the difficulty of mounting a successful campaign against company management. El Paso dissidents won the support of a host of influential names in the investment world, including institutional proxy adviser Institutional Shareholder Services and the AFL-CIO, the big labor organizer. But despite all that, Tuesday ended in a scenario the El Paso opponents had shuddered to consider.

"If we lose this fight, with the stellar board we've put together, shareholders might as well start writing blank checks to companies that have been playing games," Frank Powell, an El Paso shareholder directly involved in the campaign to oust the company's board, said before the meeting. "But personally, I think people are tired of getting ripped off."

Betty Killen, an El Paso shareholder fretting about her pension, agreed.

"I realize it's hard to beat out management," Killen said. "But this is so important -- not only to us but to all of corporate America."

The comments from the combantants late Tuesday were less dramatic. El Paso spoke of "preliminary results" indicating a victory for its slate, while the dissident group conceded it may have fallen "a bit short of getting the shareholder votes needed to elect our slate."

After weeks of brickbats from both sides, however, Tuesday's remarks lowered the volume. CEO Ron Kuehn said, "The efforts of both sides during this proxy contest are a testament to each group's interest in and commitment to the future of El Paso." Zilkha added, "Whatever the final outcome, I do hope that management and the incumbent board have also heard loud and clear what the El Paso shareholders expect of them."

El Paso shares, after rising 37 cents during Tuesday trading to $9.04, dropped 2 cents in postclose action to hit $9.02.

Long Road

More than a year has passed since legendary oilman Oscar Wyatt first warned that El Paso could be risking an Enron-like collapse. Last summer, with the sector still numbed by Enron's plunge into bankruptcy, Wyatt officially launched a campaign for reform at neighboring El Paso. During a press conference staged after El Paso's 2002 annual meeting, Wyatt accused senior management of wrecking a solid energy company by borrowing heavily -- and even secretly -- to finance a dangerous energy-trading habit. He asked for the company to come clean. And when El Paso brushed him off, the combative oilman took matters into his own hands.

"He doesn't mind being an underdog coming into a fight," said Wyatt spokeswoman Dorothy Beeler. "But when he engages in a battle, he plays to win."

By Tuesday, Wyatt was already poised to pull off the biggest upset in recent history. His proxy fight, officially led by Zilkha, scored advance endorsements from powerful organizations like Institutional Shareholder Services and the AFL-CIO. On the eve of Tuesday's meeting, rumors began swirling that Zilkha's team had already snagged key support from El Paso's largest shareholder. But even as investors began streaming into Houston's downtown convention center, both sides continued to brace for the narrowest of decisions. The dissidents, in particular, had no idea what to expect.

"We've been trying to find out what our odds are," Powell said just ahead of Tuesday's meeting. "But there's no precedent.

"If we win, this would be the first time in history that an entire board of directors -- at least at a major corporation -- has been replaced."

Sending a Message

Technically, Killen stopped working for "Mr. Wyatt," as she still respectfully calls him, years ago.

Killen retired in early 2001, ending a 36-year career at Coastal after the company merged with El Paso. But she felt uneasy even before she stepped out the door.

"I worked a few months during the transition period," Killen recalled. "And I could tell right away I did not like the way the company was being run. It was scary."

Killen saw regular employees walking around with corporate credit cards -- and company bills, nevertheless, going unpaid. But she was especially troubled by El Paso's fat paychecks to executives.

Beeler, too, was alarmed. Even before the merger, she noted, El Paso's head of human resources was earning more than Coastal's CEO.

For Killen, the El Paso culture was as foreign as it was troubling. In newspaper surveys, Coastal executives had consistently ranked among the lowest-paid in the industry. Employees there often joked that they could switch to another energy company down the street, such as Enron or Dynegy, and collect huge raises and wonderful perks. And Wyatt always offered his standard response.

Recalls Killen: "He would say, 'Then go over there and work. I run this company for the shareholders -- not the employees.'"

Killen, like most Coastal employees, chose to stay. And as shareholders, they scored big rewards along with the rest.

"Our stock would go up and split, go up and split, go up and split," Killen said. "We were working hard -- and doing great."

Recently, Killen and some of her former colleagues went back to work for Wyatt. The pay was worse than ever. But the old Coastal employees weren't looking for compensation. They had voluntarily showed up at Wyatt's side to help salvage what was left of the company he -- and they -- had built.

For weeks, they dialed up small El Paso shareholders and asked them to vote for Zilkha's slate. And on the other end of the line, they heard people every bit as concerned as themselves.

"It was probably 3-to-1, the people who were saying, 'Yes, I'm with you,'" Killen said. "We worked so hard to build that company. This downturn is one of the saddest things I've seen."

Killen cast her vote early for the dissident camp. But she showed up Tuesday hoping to hear the final tally in person. Last year, she trekked all the way to Dallas to witness Wyatt's kickoff campaign. She wasn't about to miss the fruits of that contest -- the biggest shareholder meeting in a decade -- right in her own back yard.

It's Too Quiet in Here

For most El Paso shareholders, Tuesday's meeting was a first.

Normally, El Paso's annual meetings are relatively quiet affairs held in remote locations. Last year, for example, none of the independent directors even showed up. And most El Paso employees worked through the meeting back at their offices in Houston.

"No wonder the company got into trouble," Powell said. "They never had to answer any hard questions."

Powell predicted a far different scene ahead of Tuesday's meeting, for which El Paso rented the entire downtown convention center to make sure its huge employee base could attend.

"It won't be a sweet and pretty deal," Powell said before the meeting. "Some people have watched their whole retirement go down the drain. God knows what they're going to say."