8. Some details of the audit committee meeting from the official minutes, as well as copies of the presentations prepared for the meeting. The fact that Causey failed to mention certain transactions comes from a reconciliation of the deals that were done versus what he is recorded in the minutes—and in his official presentation—as having said. Also see the Batson Report, vol. 4, 109, and vol. 4, app. D, 110.
9. A copy of the Bermingham e-mail was obtained by the author.
10. Details of the Houston meeting from a copy of the bankers’ presentation. Also see the Simpson affidavit of June 27, 2002.
11. Details of Project California, and the role played by Morgan Stanley, from a Feb. 2000 presentation put together for the effort, “Project California Discussion Materials.”
12. Some details of the Enron and Blockbuster negotiations from a May 1, 2000, copy of the document “Non-binding Term Sheet.”
13. Some details of the trip to the Caymans from the Simpson affidavit of June 27, 2002.
14. Some details of the presentation to Skilling from an undated document by the wholesale division laying out the situation in California. The document is titled “The Supply/Demand Imbalance Has Been Masked by Several Years of Above-Normal Hydro.”
15. Some details of the efforts to bring Glisan and Mordaunt into what eventually became the Southampton transaction from the Wilmer, Cutler notes of an Oct. 30, 2001, interview with Mordaunt. Also see the March 20, 2000, document “Southampton Place L.P. Amended and Restated Agreement of Limited Partnerhsip,” as well as the cooperation agreement signed by Kopper as part of U.S. v. Kopper.
16. A copy of the MEGS DASH, as signed by McMahon, was obtained by the author. Some details of his response to the signing and his subsequent discussions with Baxter from the notes of his Wilmer, Cutler interview of Jan. 21, 2002.
17. Details of the concert from Michael D. Clark, “Crosby, Stills, Nash & Young Can Still Rock,” Houston Chronicle, March 8, 2000, 1.
18. Some details of the Fortune photo shoot from entries in Skilling’s and Lay’s schedule books. Also see Brian O’Reilly, “The Power Merchants,” Fortune, April 17, 2000, 148.
19. A copy of McMahon’s handwritten notes was obtained by the author.
20. Timing of the McMahon meeting from the schedules of McMahon and Skilling. Some details of their discussions and thoughts from the McMahon notes, and the testimony of both men before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations, as well as the notes of McMahon’s Jan. 21, 2002, interview with Wilmer, Cutler.
21. Some details of Sutton’s involvement in the McMahon complaint from “Affidavit of Joseph W. Sutton,” signed on March 6, 2002. The document appears never to have been formally submitted to any public case file involving the Enron litigation. In his affidavit, Sutton states that he believes his meeting with Skilling occurred on March 20, 2000. However, other information reviewed by the author suggests that this recollection must be inaccurate. Skilling and Sutton do have a scheduled meeting the days preceding that, and on March 18, according to schedules and travel records, Skilling left the country for Brazil and did not return for several days. Other reporting suggests that, indeed, the meeting with Sutton took place the week prior to March 20. McMahon’s recollections of his contacts, as laid out in his Jan. 21, 2002, interview with Wilmer, Cutler, also contradict Sutton’s beliefs on the timing and coincide with the sequence presented in this book.
22. Some details of the trip to the Caymans from the Simpson affidavit of June 27, 2002.
23. Some details of Sutton’s involvement from his March 6, 2002, affidavit. Also see the notes of the Jan. 21, 2002, Wilmer, Cutler interview with McMahon.
24. Some details of the final days before the creation of Southampton from the Simpson affidavit of June 27, 2002. Also see the Wilmer, Cutler notes of the Oct. 30, 2001, interview with Mordaunt; the March 20, 2000, document “Southampton Place L.P. Amended and Restated Agreement of Limited Partnerhsip”; the Kopper cooperation agreement that is part of U.S. v. Kopper; and the March 6, 2000, letter from Kopper on behalf of LJM2 to Darby of Greenwich NatWest. Also see the Batson Report, vol. 4, app. C, 121.
25. Some details of Skilling’s return and discussions with Sutton from the Sutton affidavit, as well as entries in Skilling’s schedule book.
26. The Polish plant repurchase was first described in the Powers Report, 140.
27. Some details of McMahon’s trip to Barton Creek, and his return, from entries in his computerized schedule. Other details from his Jan. 21, 2002, interview with Wilmer, Cutler.
28. Timing of the Whalley meeting from an entry in Skilling’s schedule.
29. Some details of the meeting between McMahon and Fastow from the notes of McMahon’s Jan. 21, 2002, interview with Wilmer, Cutler.
30. Timing of the Raptor meeting from Skilling’s schedule book. Some other details from Skilling’s Dec. 4, 2001, testimony before the SEC.
31. Some details of the Skilling, McMahon, and Whalley meeting from notes of McMahon’s statements in the Wilmer, Cutler interview of Jan. 21, 2002.
32. McMahon’s change of jobs was announced internally on April 7, 2000, in an e-mail from Fastow.
CHAPTER 13
1. Certain details, including the minute that the Golden Knights landed and Lay’s outfit and seating, from photographs taken by a number of fans during the opening-night festivities. Additional information from Carlton Thompson, “Phillies Spoil Opener for Astros,” Houston Chronicle, April 8, 2000, Sports, 1; and David Barron and Eric Berger, “All Aboard for the New Ballpark,” Houston Chronicle, March 30, 2000, A1. Also see the internal Enron document “April 7, 2000: Enron Field Opening Day.”
2. Some details of Wanda Curry’s experiences from McLean and Elkind, Smartest Guys in the Room, 299–301. Other details from audits of EES from the draft document “Enron Energy Services Business Audit Review” for the years 1998, 1999, and 2000. Also see the Jan. 24, 2000, “tentative and preliminary” memo to the file from the EES accounting department, “EES Contract Accounting”; and the April 20, 2000, document “Enron Energy Services Risk Management: A Presentation to RAC.”
3. Details of the time and place of the Badr El-Din meeting from entries in Skilling’s schedule book. Some details of Badr El-Din’s background from “Offsets in Defense Trade Fifth Annual Report to Congress,” DISAMJournal, Sept. 22, 2001; and M. Satyanarayan, “Ghantoot Wins Opening Tie in Polo,” Gulf News, Jan. 13, 2000. Some details of his ties of Enron from “UAE’s Dolphin Project to Maximize Gas Value Chain, Industrial Zone,” Of shore, April 2000, 54; David Barboza, “Enron Sought to Raise Cash Two Years Ago,” New York Times, March 9, 2002, C1; and the 1999 presentation “Project Dolphin.”
4. Some background of Belden and the Portland trading effort from testimony before the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission. These testimonies include those of Richard Sanders on July 9 and 10, 2002; Christian Yoder on June 2, 2002; John Arnold on Aug. 9 and 10, 2002; and an undated transcript of the testimony before the same bodies by Stephen Hall. Also see the Aug. 17, 2000, e-mail from James Steffes of EES to Belden and other members of the trading team, “FERC Investigation in CA—What Should They Be Looking For?” and the documents titled “Daily Position Report” for Jan. 17, 2000, through the end of that year, which lay out the trades of every division within Enron, including the western markets for power trading.
5. Dialogue on the Forney transactions from a transcript of the recorded April 15 call obtained by the FERC.
6. Details of the trading strategies from the testimonies before the CFTC and the FERC by Sanders on July 9 and 10, 2002; Yoder on June 2, 2002; and Hall’s undated transcript. Also see a copy of the Dec. 6, 2000, memo from Yoder and Hall to Sanders, “Traders’ Strategies in the California Wholesale Power Markets/ISO Sanctions.”
7. Details of the wire transfers from the original documents. Also see U.S. v. Fastow and the Simpson affidavit of June
27, 2002.
8. Details of the May 1 finance committee meeting from the original minutes, as well as handwritten notes taken by the corporate treasurer and the presentation prepared by Glisan. Also see the Batson Report, vol. 3, app. C, 25, and the Wilmer, Cutler notes from the Jan. 29, 2002, interview with Norm Blake.
9. Details of the Southampton wire transfer from the superseding indictment in U.S. v. Fastow.
10. Some details of the May 22, 2000, stage-two emergency from Nancy Rivera Brooks and Zanto Peabody, “Heat Triggers Moderate Power Emergency,” Los Angeles Times, May 23, 2000, B2.
11. A copy of the Quaintance e-mail was obtained by the author. See also the Batson Report, vol. 4, app. B, 64.
12. Some details of the meeting between the accountants and the SEC from Levitt, Take on the Street, 127–28.
13. Andersen’s work on the Raptors from the original March 28, 2000, memo to file “Raptor Transaction” written by Duncan and other members of the Enron engagement team; also see the Feb. 1, 2000, e-mail from Bass to Stewart and others headed “Enron Transaction,” as well as the response on the same day from Debra Cash and another response, “Clarification: Enron Transaction,” from James F. Green. Fastow’s and Glisan’s efforts to obtain authorization for Raptor II from the minutes of the meeting of the executive committee of the board on June 22, 2000, as well as the presentation from that meeting, “Project Raptor II.” Also see the LJM2 approval sheet of June 26, 2000, for the deal titled “Raptor II”; the July 21, 2000, memo to the files by Duncan and the Enron engagement team, “Raptor II Transaction”; the Powers Report, 97–128; and the Batson Report, vol. 4, app. D, 73, and vol. 2, app. L, annex 5.
14. Details of Larry Lawyer’s tax fraud relating to RADR from the criminal information that was part of his guilty plea to the charges in United States of America v. Lawrence W. Lawyer, filed on Nov. 26, 2002, in Federal District Court in Houston. Other details of the transaction from the deal-approval sheet for “Bulk Fiber Sale,” June 28, 2000, and the same sheet for “Project Backbone,” June 30, 2000. This is the sheet signed by Lay. Mordaunt’s role in EBS from the document “Status Change Form,” Feb. 1, 2000, and the Wilmer, Cutler notes from her Jan. 12, 2002, interview. Also see the June 2000 presentation by Enron Broadband Services “Project Backbone,” and the “Operation, Maintenance, and Repair Agreement” between EBS and LJM2 (listed on the cover page as “purchaser”), June 28, 2000. Also see the Batson Report, vol. 2, app. L, annex 4, 34–35.
15. Details of the efforts to sell off the Nigerian barges from the Batson Report, vol. 2, app. L, annex 4, 36–37; the Wilmer, Cutler notes from the Jan. 29, 2002, interview with Quaintance and from the Jan. 11, 2002, interview with Kevin Jordan. Also see the June 13, 2000, e-mail from Kira Toone of Merrill Lynch to Alan Hoffman of Whitman Breed Abbott & Morgan; and the Merrill Lynch “Credit Flash Report” for the week ending Dec. 23, 1999. Dialogue from Kopper’s testimony in U.S. v. Bayly et. al.; additional details of the buyback proposal from Glisan’s testimony in the same case.
16. Details of the Cochise transaction from the Batson Report, vol. 3, app. G, 51–52.
17. The excessive number of faxes arriving at Buy’s home in New Hampshire was described by Kaminski in his interview with Wilmer, Cutler on Dec. 19, 2001.
18. Details of the stage-two alert from “Heat, Humidity in Southern California Force Regulators to Declare Emergency,” Associated Press, June 26, 2000.
19. Some details of Skilling’s African trip from entries in his schedule book and travel records.
20. Details of Fastow’s declared distribution from “LJM Cayman L.P. Analysis of Accounts,” Nov. 16, 2000; a July 14, 2000, wire-transfer request from LJM Cayman to LJM2 Capital Management. Also see the Batson Report, vol. 4, app. F, 60. Background on the Fastow Family Foundation from the certificate of incorporation filed for the group on March 14, 2000, with the office of the secretary of state for Delaware.
21. Details of the timing of Lay’s meeting from his schedule book and his personal itinerary, headed “New York/London/Nice, July 18–23, 2000, KLL Itinerary.” Also see the Aug. 16, 2000, document “Blockbuster Transaction Summary.”
22. Details of the effort to bump up Enron’s earnings to thirty-four cents from the superseding indictment in U.S. v. Skilling et al. Also see the Enron release from July 24, 2000, “Enron Reports Second Quarter Earnings of $0.34 per Diluted Share.”
23. The dialogue in the second-quarter conference call from an official transcript, July 24, 2000.
24. Details of the summer problems in California from Betsy Streisand, “Power to the People,” U.S. News & World Report, Aug. 21, 2000, 50; David Lazarus, “PUC Calls for Probe of Deregulation,” San Francisco Chronicle, Aug. 2, 2000, A1; Lazarus, “Davis Acts to Bridge Energy Gap,” San Francisco Chronicle, Aug. 3, 2000; and Sweeney, California Electricity Crisis, 128–44.
25. Some details of Lay’s movements during the Republican National Convention from a copy of his itinerary for that week, headed “Republican National Convention, August 1–4, 2000, Philadelphia, Pennsylvania, Itinerary for KLL and LPL.” Background on the convention and the Regents from Mike Allen, “For ‘Regents,’ a Special Class of Party Favors,” Washington Post, Aug. 3, 2000, A15; and Jim Drinkard, “Party Never Forgets Royal Treatment for Big Donors,” USA Today, Aug. 4, 2000, 5A.
26. The words of Bush’s acceptance speech from a transcript of the speech. Also see Frank Bruni, “Bush, Accepting G.O.P. Nomination, Pledges to ‘Use These Good Times for Great Goals,’ ” New York Times, Aug. 4, 2000, p A1.
27. Details of the Project Summer transaction from the confidential Aug. 1, 2000, presentation to the Enron board titled “Project Summer”; the minutes from that special meeting; the document “Project Summer” presented to the full board on Aug. 8, 2000; and the draft document from Aug. 9, 2000, “Project Summer Q&A.” Also see the July 25, 2000, document “Project Summer Update” and the Aug. 3, 2000, memo to the file by Rodney Faldyn, “Project Summer Dabhol Total Return Swap.”
28. The events in this meeting were recounted by multiple attendees. However, while I believe I have copies of all Enron board and committee minutes back to 1985, no one could precisely place when these events occurred, although all agreed they took place sometime in Aug. 2000. Minutes in several meetings, which are written in a very diplomatic style, have different events that could be these discussions. Also, many of the presentations were faxed to board members before or after the actual meeting, so it is difficult to ascertain which precise meeting these events occurred in. The possibilities are the finance committee meeting of Aug. 7, the full board meeting of Aug. 7–8, or the full board meeting of Aug. 1. Rather than guess, I have relied on the reconstruction provided by participants, coupled with the reports that were faxed to the directors around that time. Those include Skilling’s “return analysis” for the international division from 1994 to 2000.
29. The signing of the Project Summer agreement from the term contract, Aug. 11, 2000.
30. Some details about the collapse of Mark’s career from Rebecca Smith and Aaron Lucchetti, “Water Venture Sinks an Enron Career,” Asian Wall Street Journal, Aug. 29, 2000. Timing of the meeting from entries in the schedules of Skilling and Lay. Also see the Azurix press release of Aug. 25, 2000, “Rebecca P. Mark Resigns Azurix Chairman and CEO Post.”
31. The timing of Skilling’s meeting with the international group from an entry in his schedule.
CHAPTER 14
1. Some details of Sheikh Zayed’s surgery from “UAE President Undergoes Successful Kidney Transplant,” Xinhua General News Service, Aug. 28, 2000; Olivera Perkins, “Sheik Undergoes Kidney Transplant,” Plain Dealer, Aug. 29, 2000, A1; Sarah Crump, “Blossom Bonanza with Sheik in Town,” Plain Dealer, Sept. 1, 2000, B7; Regina McEnery, “Sheik’s Age Makes Transplant at Clinic Unusual,” Plain Dealer, Sept. 18, 2000, E1; Bob Dyer, “A Big Wallet Can Bring Big Adventures,” Beacon Magazine, Oct. 22, 2000, 4; and “Sheik Touched by Get-Well Letters Donates $30
,000 to School,” Associated Press, Nov. 22, 2000.
2. Copies of the Zisman memo, one dated Aug. 31, 2000, and another dated Sept. 1, 2000, were obtained by the author. Also see the internal Enron memo by Mike Galvan, “Troubled Assets—Raptor,” Sept. 6, 2000; notes of the Wilmer, Cutler interview with Zisman on Dec. 12, 2001; and the Batson Report, vol. 4, app. C, 143–44.
3. Details of Raptor III from the Sept. 2000 memo to the file of Kevin Jordan, Clint Walden, and Alan Quaintance, “Project Raptor 3”; and the Sept. 20, 2000, memo from the same executives, “Project Raptor.” Also see the Powers Report, 114–18, and the Batson Report, vol. 4, app. C, 135–44; Wilmer, Cutler notes from the Jan. 11 and 15, 2002, interviews with Jordan, and the Dec. 11, 2001, and Jan. 31, 2002, Siurek interviews; the LJM approval sheet for Raptor IV, Sept. 11, 2000; the Oct. 20, 2000, memo from Enron Corp. to Talon I LLC, “Equity Swap Transaction”; the Nov. 9, 2000, memo to the file by Duncan and other members of the Enron engagement team, “Raptor 3 Transaction”; and the Dec. 27, 2000, memo to the files by the engagement team, “Raptor IV Transaction.” Additional information from the FBI 302 of Deb Cash from her Feb. 21, 2002, interview.
4. Details of Lay’s situation from downloaded data in a financial navigator program, showing all of the family’s transactions from 1998 through 2001, as well as personal balance sheets for 1999, 2000, and 2001. Details of the individual drawdown on the credit lines from individual drawdown requests submitted on Lay’s behalf.
5. Timing of the meeting, and some details of the discussion, from entries in Mintz’s personal schedule. Also see the Wilmer, Cutler notes from the Oct. 20, 2001, interview with Mintz, and his May 16, 2003, deposition taken as part of the Batson investigation.
6. Timing of the meeting from entries in the executives’ schedules. A copy of the purported “Global Galactic Agreement” was obtained by the author. The agreement, along with the fact that it had been written down, was also described in U.S. v. Skilling. Fastow has represented to the government that this agreement was approved by both him and Causey. While Causey’s initials are also present on this document, Causey had pleaded not guilty in this case, and I cannot state with absolute certainty that he himself is the person who placed his initials on the document.
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