Skilling (left) and Fastow share an exultant moment.
Fastow at the dinner table.
A midrace lunch break (Skilling is standing in background; Fastow is standing in foreground).
Skilling (left) catches some sun after a day on the race course.
Ken Rice gets nine stitches. He wiped out on his bike, putting his tooth through his lip.
Rick Causey, Enron’s chief accounting officer, pushed Arthur Andersen hard to see things Enron’s way. (Gamma)
Rick Buy, the head of Enron’s risk assessment and control department, agonized over his inability to stop bad deals. (Gamma)
Longtime Enron executive Amanda Martin says that the company managed to anger virtually all of its big customers. The word was out, she says: “Don’t do business with Enron. They’ll steal your wallet when you aren’t looking.”
Greg Whalley was the only one who could control the unruly traders. He became Enron’s president when Skilling left the company. (Landov, Bloomberg News)
Skilling and Fastow were among those who built enormous houses with their Enron wealth. Skilling moved into his 8,120-square-foot house just before he quit Enron. (Michael Stravato, Gamma)
Fastow’s house was still under construction when he was indicted. (Pat Sullivan, AP)
Ken Lay in better times: (left) at a company celebration in 1998 and (bottom) with his wife Linda at an Alexis de Tocqueville Society reception in early 2001.
(Left: GettyImages; bottom: Dave Rossman, Gamma)
Federal Reserve Chairman Alan Greenspan received the Enron Prize for Distinguished Public Service from Lay in November 2001, less than three weeks before the company filed for bankruptcy. (David J. Phillip, AP )
Even before she wrote her memo to Lay in August 2001, Sherron Watkins told an Enron friend, “Andy and Causey are going to jail.” (Steve Liss, Gamma)
Fastow and his wife Lea leave the courtroom in May 2003 after she was indicted and he was charged with new offenses. (David J. Phillip, AP)
Laid-off Enron employees wait outside company headquarters on December 3, 2001, the day after the bankruptcy filing. (David J. Phill ip, AP)
Skilling on a break during his combative appearance before the Senate Commerce Committee in February 2002. (Robert Trippett, Sipa Press)
INDEX
The page numbers in this index refer to the printed version of this book. To find the corresponding locations in the text of this digital version, please use the “search” function on your e-reader. Note that not all terms may be searchable.
Abib, Osmar, 163–64, 371
ABN Amro, 164
accounting, 132, 141–42, 165, 230, 261, 328, 361, 397, 406–7, 409, 411–12, 413–14, 416, 419
EBS and, 289–90
fair value, 129, 308–9
fraud, 354–59, 406
historical-cost, 39–40
mark-to-market, 39–42, 45, 60, 66, 78, 92, 94, 127, 131, 158, 181, 218, 227, 296, 303, 305, 318–20, 388, 411,
413
problems with, 95, 96–97
rules and procedures of, 155, 157, 184, 264, 293, 295, 357
scandals, 71, 390
see also Arthur Andersen; GAAP
Adelphia, xxiv, 413
Adlong, Shannon, 382–83
Africa, 339, 350
Alchemist, The (Coelho), 72
Alexander, Jim, xiii, 95
Alkhayat, Hamd, 121, 124
Allario, John, 122
Allied Signal, 182
Allison, Herbert, 235
Al-Waleed, Prince, 391
American Centurion, 340
American Council for Capital Formation, 146
American Enterprise Institute, 87
American Express, 340
American Fork, 293
American Heart Association, 146
America Online (AOL), 319
Amnesty International, 81
“analyst capture,” 235
analysts:
credit, 236–39, 323, 353
Enron meetings for, 176, 179–80, 242–44, 284, 314, 320–21, 323, 345
natural-gas, 232
securities, 155, 230–35, 236, 237, 240, 243–44, 296, 320, 326, 331, 348–49, 353, 368, 387, 393, 396, 407
Andersen, Arthur, 143–44
Andersen Consulting, 144–45
Antioco, John, 291–92
Apple Bank, 17, 18, 19, 20, 21
Apple Computers, 230
Arab oil embargo, 1
Argentina, 74, 252–53, 257
Arkansas Teacher Retirement System, 202
Arnold, John, xiii, 219, 223–24, 283, 304, 339, 397, 398
Arthur Andersen, 73, 94–95, 116, 124, 161
annual energy symposium of, 241
consulting arm of, 144–45
demise of, xxiv, 406
on EES, 184, 300
Enron and, 19, 20, 141, 143, 145–49, 157–59, 162, 168, 169, 176, 207–9, 239, 295–97, 305, 307, 316–18, 354, 356, 358, 381–85, 393, 406–7, 416
Enron accounting restatement and, 363, 368–69, 383–84, 393, 394
Enron employees from, 153–54, 169, 323, 354, 355, 362
firmwide strategic advisory council of, 147
on LJM, 190, 197, 361, 393
obstruction-of-justice conviction of, 406–7
Professional Standards Group (PSG) at, 148, 190, 295, 318, 323, 363, 382
reputation of, 143–44
scandals involving, 145, 147, 357, 381
Art of War, The (Sun-tzu), 58
Aspen, Colo., 423
Astin, Ron, xiii, 166
Atlantic Water Trust, 249, 253
attorney-client privilege, 382
Avici Systems, 290, 308, 354
Ayers, Judith Diane, see Lay, Judith
Azurix, 90, 113, 124, 246–63, 285, 313, 341, 368–69, 373, 374, 387, 399, 417
collapse of, 318
IPO and stock of, 251–52, 253, 254, 256, 258
backup credit lines, 379, 386
Badum, Jim, 176
Bahía Blanca, 257
Baker, James, xxiv, 79, 423
Baker Hughes, 402
Baldwin United, 319–20
Ballentine, James, 341
Ballmer, Steve, 313
bandwidth on demand, 286
bandwidth trading, 110, 188, 243, 244, 284, 286–87, 290
Bank of America, 81, 343
Bankers Trust, 39, 42–43, 57, 58, 115
banking crisis, Texas, 36
Bank One, 167
Baptist Church, 86
Barclays, 168–69
Barone, Ron (PaineWebber/UBS Warburg analyst), xvi, 85, 292, 325, 348
Barone, Ron (S&P analyst), 238
Barrington, Brian, 124
Bartiromo, Maria, 219
Barton, Joe, 173
Bass, Carl, xvi, 295, 297, 316–18, 363
Bauch, Billy, 294
Bauer, Tom, 169
Baxter, Carol, xxii
Baxter, Cliff, xiii, 38, 64–66, 105, 122, 210, 215, 228, 249, 260, 299–300, 313, 315, 343, 390
concerns about Fastow of, 152, 163, 333, 356
departure of, 333–34, 349, 350, 361, 380, 397
at Enron North America, 207, 213
as mergers and acquisitions specialist, 64
as negotiator, 107–8, 109, 262
Pai’s problems with, 65, 66, 228, 302
suicide of, xxi–xxiii, xxv, 408, 418
Baxter, J. C., xxii–xxiii
Bayly, Dan, xvi, 208–9, 411
Beard, John, 18, 19, 20
Bear Stearns, 321
Bechtel, 81
Belden, Tim, xiii, 264, 266, 269, 271–76, 278–79, 282–83, 300, 309, 339,
413, 420
guilty plea and deal of, 413
Belfer, Arthur, xiii, 13
Belfer, Robert, xiii, 13, 199
Beowave geothermal energy facility, 268
Berardino, Joseph, xvi, 147, 317
Bergstrom, Steve, xvii, 391–92, 395
, 402
Berkowitz, Sean, 419, 421–22
Berlin, 254
Bermingham, David, xvi, 194–96, 365, 384
Bienenstock, Martin J., 390–91
Biochemical Research Foundation, 86
Blachman, Jeremy, 169, 359
Black, Don, 304
Blackstone Group, 405
Blockbuster, 291–94, 296–98, 368
Blodget, Henry, 231, 234
Bloomberg News, 340
Bobcat, 308
Bolivia, 74, 75, 203
bond market, 30
Borget, Louis, xiii, 16–24
Bossidy, Larry, 182
Boston Beer Company, 47
Bowen, Ray, xiii, 394, 398, 404
Bowen, W. J. (Jack), 6–10
Braveheart, see Project Braveheart and Enron Broadband Services
Brazil, xxiv, 75, 77, 203, 258, 259, 366
Brewer, Lynn, 264
British Petroleum, 391
broadband, see Enron Broadband Services
Brobeck Phleger, 274, 276–77
Bronson, Phyllis, 386
Brooklyn Union, 34
Bruin Interests, 90
Bryan, Lowell, 66
Bucharest, 254
Buenos Aires deal, 252–53, 254, 257,
313
Buffett, Warren, 67, 391
bull market of 1990s, 132–33, 143, 150, 229, 231–32, 234, 318–19, 326–27
Burns, Ron, xiii, 69, 100
Bush, Barbara, 423
Bush, George H. W., 86, 423
Bush, George W., xxiv, 86, 302, 313, 426
Lay and, 87–88, 89, 173–74, 411
Bush, Jeb, 254
Bush family, 365
Bush Pioneers, 88
business press, 230
BusinessWeek, 225, 281, 313, 350
Butler, Bill, 217
Buy, Rick, xiii, 115–18, 130, 141, 181, 194, 313, 316, 346, 362, 363, 399
on LJM deals, 192, 193, 197, 199, 203, 205, 305, 307, 311, 328–29, 361
buy ratings, 233, 234, 348, 371
cable television industry, 287
Cactus, 67, 132, 138
California, 248, 345
attorney general’s office in, 274
energy crisis in, 271–83, 300–301, 316, 327, 335–36, 338, 352–53, 373, 413, 416
energy deregulation in, 174–75, 176, 264–83, 327
as growth market, 10, 11
California, University of, 178
California Power Exchange (Cal PX), 266, 268, 269
California Public Employees Retirement System (CalPERS), 67, 127, 132, 168, 176, 190, 316, 383
California Public Utilities Commission (CPUC), 265, 266, 274
California State University, 178, 183
calls, 37, 231
Calpine, 283
Cambridge, Paul, 388
Campbell, David, 240, 244–45
Campsie Limited, 194, 196
Canada, 61, 254
Canadian Imperial Bank of Commerce (CIBC), 202, 293–95, 410
Cancún, 254
capacity contracts, 38
Carpenter, Michael, 395
Carter, Rebecca, xiii, 124, 307, 310, 327, 345, 347, 348, 350, 358
Cash, Debra, 362
cash flow, as finance basic, 150
Castleman, Kent, 203
Causey, Rick, xiii, 127–28, 141–43, 172, 299–300, 313, 325, 347, 357, 362, 367–69, 374, 415, 416, 419–20
as chief accounting officer, 172, 317–18, 393
Duncan’s friendship with, 146–48, 369
LJM deals and, 195, 197, 199, 200, 204, 205–7, 209, 307, 309, 311, 328, 330, 355, 361
on Project Raptor, 323–24
Cavuto, Neil, 253
Cayman Islands, 194, 310
CCC Information Services, 135–36
Ceconi, Margaret, xiii, 180, 182–83, 303–4, 345–46, 358–59
Center for Financial Research and Analysis, 231
CEO Magazine, 239
CFO Excellence Award, 154
CFO Magazine, 154, 250
CFTC (Commodities Futures Trading Commission), 96, 224
Channel Islands, 21, 159
Chanos, Jim, xvi, 319–21, 325, 326, 331, 348–49
Character Education Partnership, 86
Charles, Prince of Wales, 48–49
Chase Manhattan Bank, 116, 159, 160, 162, 164, 165, 251
EES and, 178
LJM and, 200–203, 310, 311
merger with J. P. Morgan of, 159
see also J. P. Morgan Chase
Chemical Bank, 162
Cheney, Dick, 87, 280
Cheney, Lynne, 87
ChevronTexaco, 392–93, 394–95
Chewco, 168–70, 189, 330, 364, 383–84, 393
Chicago, Ill., 419
Chicago City Gate, 38, 40
China, 74, 75, 109, 240, 259
Chinese Wall, 233–34, 375
Choctaw, 157
Christian Coalition, 174
Churchill, Winston, 133
CIA, 45, 221
CIBC (Canadian Imperial Bank of Commerce), 202, 293–95
Cisco, 93
Citibank, 60, 162
Citigroup, 96, 159, 160, 162–65, 244, 380, 385, 387, 395, 402, 407, 410, 427
LJM transactions and, 202, 205, 230
in Project Nahanni, 157
in Whitewing transaction, 155–56
Civil Service Commission, U.S., 6
Clinton, Bill, 82, 96
CNBC, 125, 219, 231
coal, coal trading, 1, 10, 36, 225
Coale, Carol, xvi, 102, 244, 347, 359
Coalition for Jobs, Growth, and Competitiveness, 87
Coca-Cola, 95
Coelho, Paulo, 72
coffee futures, 226
cogeneration (cogen) projects, 46–48
see also Teesside power project
collateralization, 168
Colombia, 74
Colwell, Wes, 413
Commerce Department, 385
commercial paper, 378–79
Commerzbank, 235, 321
Committee on Governmental Affairs, 270
Commodities Futures Trading Commission (CFTC), 96, 224
commodities trading, 16, 22, 27, 30, 37, 38, 65, 207, 225, 409
Compaq, 86, 182
Compass Bank, 343
Condor, 355–56
Congress, U.S., 159, 162, 172, 173, 231, 238, 345, 407, 408, 416
natural gas regulation in, 8–9
Congress Party, 81
Conoco, 1, 57
Continental Airlines, 153
Continental Bank, 135–37, 140, 141
Continental Resources, 73
Contrarian Investor, The, 319
Cooley, Denton, 423
Cooper, Steven, 155
Coopers & Lybrand, 153–54
corporate ethos, 133
corporate whistle-blowers, 358
Covey, Stephen, 58
Cox, David, xiii, 290–92, 297–98, 334–35
CPUC (California Public Utilities Commission), 265, 266, 274
credit derivatives, 226, 340–41, 349
Credit Rating Agency Reform Act, 426
Creditex, 341
credit-rating agencies, 154, 155, 156, 161–62, 230, 236–39, 250, 312, 341, 366, 394–95, 403
credit ratings, 236–37, 373, 380
Credit Sights, 238
Credit Suisse First Boston (CSFB), 159, 163–64, 179, 194–96, 202–3, 234, 235, 244, 341, 348, 353, 371, 407
Croatia, 258, 260
Crowley, Larry, 175
crude oil futures, 16
Cuiabá, 203, 206, 259, 330
Curry, Wanda, xiii, 299–300, 301, 303, 304
Cutler, Stephen, 410
Dabhol project, 79–83, 94, 102, 260, 315, 340, 342, 353, 366, 373, 399, 409
Darby, Giles, xvi, 194–96, 365, 384
DASH (deal-approval sheet), 115, 117
Davis, Gray, 277, 279
D
ean Witter Reynolds, 102, 104
Dear, Leigh Anne, 146
Death Star, 269–70, 274, 275, 276, 282, 335
debt, as finance basic, 150
debt analysts, 237
deep-discount bonds, 30
Deffner, Joe, 161
Delainey, Dave, xiii, 218, 228, 276, 302–4, 308, 359, 404, 413–14, 421
DeLay, Tom, 87
Deloitte & Touche, 390
Delta, 159, 160
DeMauro, David, 183
Democratic party, 85, 88
DePelchin Children’s Center, 98
deregulation, 8–9, 13, 27, 33, 48, 85, 88
in California, 174–75, 176, 264–83, 327
Lay as advocate for, 2–3, 172, 175, 240, 265, 267, 278, 281, 327
of retail electricity, 172–78, 180
state-by-state, 173–74, 176–77, 180–81
derivatives, 37, 39, 42, 158, 323
derivatives-pricing models, 192
Derrick, Jim, xiii, 344, 357, 358, 366, 376, 402
Deutsche Bank, 229, 244, 388
DeVille, Mike, 195
Dickson, Glenn, 184
Dietart, Jeff, 233
Dilg, Joseph, xiii, 357, 360–61, 366
Dodd-Frank Wall Street Reform and Consumer Protection Act, 427
Dodson, Bill, xiv, 153, 167, 169, 197, 384
Dominican Republic, 74, 78, 95, 259
Dominion Energy, 47–48
Donaldson, Lufkin & Jenrette, 156, 159, 165, 202, 232
Door, 3
dot-coms, 121, 271, 318, 372
Doty, Rob, 395, 398
Dow Jones, 319, 354
downgrading of stock, 102, 235, 348, 374–75, 394–95, 400, 401, 403
Drexel Burnham Lambert, 17, 95, 224
Driscoll, Michael, 270
DSL service, 292–93, 295
Duke, 277, 345
Duncan, David, xvi, 146–48, 176, 190, 193, 295, 317–18, 324, 362–63, 368–69, 374, 381–83, 406
Duncan, John, xiv, 10, 13, 343, 376, 408
Durst, Robert, 419
Dynegy, 105, 220–23, 241, 267, 268, 277, 280, 283, 319, 409, 410
Enron’s proposed acquisition by, 391–405
stock of, 395, 397, 401, 402
Dynegy Direct, 223
earnings-per-share numbers, 232
Eassey, Donato, xvi, 235, 244, 313, 348
Eavis, Peter, xvii, 331
eBay, 222
EBS, see Enron Broadband Services
EBS Content Systems, 293–94
Economist, 240, 256
EC Outlook, 343–44
ECT, see Enron Capital and Trade Resources
Ecuador, 252
Edison Electric Institute, 230
EES, see Enron Energy Services
The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron Page 71