The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron
Page 73
Grasso, Richard, 395
Gray, Rod, xiv, 95, 250, 253, 255
greater fool theory, 74
Greater Houston Partnership, 86
Greenspan, Alan, 240, 385
Greenwich NatWest, 194
Gross, Richard, xvii, 353
growth portfolio managers, 232
Grubman, Jack, 231, 234
Grubman, Richard, xvii, 325–26, 374
Grutzmacher, Patricia, 148
Guam, 74, 251
Guatemala, 74
Guinness Brewery, 364
Gulf & Western, 10
Gulf States Oil and Refining, 16
Hadar, Miriam, 134–35
Haedicke, Mark, xiv, 275–77, 309, 335, 405
Hain, Mary, 273, 274, 275
Hall, Stephen, 276, 277
Halliburton, 87
Hamel, Gary, xiv, 226, 239
Hannon, Kevin, xiv, 42–43, 57, 122, 288, 296, 415
indictments against, 412
Harding, John, xiv, 18–19
Harrison, William, 395
Harvard Business School, 31, 32, 45, 46, 51, 52, 57, 71, 73, 76, 391, 416
case studies of, 222–23, 239
Harvard Law School, 419
Hawaii, 125–0, 293
HealthSouth, 413
heat-rate swaps, 207
Hecker, James, xvi, 148–49, 362, 383
Heckmann, Richard, 248–49
hedge funds, 219, 319–21, 325, 385
hedging, 37, 131, 300, 305–6, 307–8
Hendrick, Max, III, 357, 360–61
Henry Pratt, 30
Hermann, Bob, 128
Herring, Joanne, 10
Herring, Robert, 10
Herrold, Beau, 424
Herrold, Linda Phillips, see Lay, Linda
Highfields Capital, 325
high-tech investments, 324
Hinds, Michael, LJM and, 196, 304
Hirko, Joe, xiv, 185, 186, 243, 287–88
indictments against, 412
historical-cost accounting, 39–40
HMOs, 184
HNG InterNorth, 11–13
hog futures, 226
Hogin, David Ralph, 17
Hoglund, Forrest, xiv, 101, 108–9, 245
hold ratings, 234, 321
Holder, Eric, 428
Holman, Hugh, 244
Hopley, John, 117
Horton, Stan, 391, 401
Hotelero del Atlántico, 78
“Hotel Kenneth-Lay-a,” 148–49, 362
House Energy and Power Subcommittee, 173
Houston, Tex., xxi, 4, 7, 8, 10, 12–13, 15, 406, 409, 411, 415–16, 418, 422–23
Houston Astros, 86, 423
Houston Chronicle, 9, 33, 350–51, 429
Houston Fire Department, 33
Houston Forum, 417
Houston Natural Gas (HNG), 10–13, 108, 128
InterNorth merger with, 16, 17, 25, 46, 47, 73, 162, 395
Houston Pipeline, 56
Howard, Kevin, xiv, 294, 295–97, 415
indictment against, 412
Hueston, John, 419, 420, 422
Hulme, Ron, xiv, 240, 244
Human Rights Watch, 81–82
Humble Oil, 5, 6
Humphrey, Gene, 60, 137–38, 202
Hunt family, 1
Hurt, Harry, III, xvii, 94, 318–19
HVAC (heating, ventilation, air conditioning), 183
hydrocarbons, 108
hydroelectric power, 221, 271–72
IBM, 31, 178
ICI, 48, 49
Illinois, 252
ImClone, 413
Independent System Operator (ISO), 266, 267, 268, 270, 271, 274, 276–78
India, 74, 79–83, 109, 240, 315, 342, 345, 353
Indonesia, 74, 260
In Search of Excellence, 31, 121
Inside FERC, 227
insider trading, 410–11, 414, 416
Institute for Advanced Study, 202
Institute for Policy Studies, 88
Institutional Investor, 83, 136, 232
institutional investors, 176, 231, 232, 243–44, 252, 326, 340
Interior Department, U.S., 6–7, 24
Internet, 70, 92–93, 184, 187–88, 223, 243, 256, 284–85, 288, 308, 343, 367
collapse of, 309, 331, 412
mania of 1990s, 185, 186, 222, 288
providers, 191, 332
start-ups, 251
stocks, 185, 231, 315
InterNorth, 11–13, 15, 16, 33, 61, 96, 108, 350
HNG merger with, 16, 17, 25, 46, 47, 73, 162, 395
investment bankers, 166, 190, 230, 234, 251, 252
personal investments of, 165, 167
investment banks, 133, 162, 164, 233, 387, 407
Enron’s fees to, 162–63
Enron Tiers for, 164–65, 194, 294
Global Finance compared to, 151–52, 165
investment grade credit ratings, 236, 239, 341, 374, 394–95, 402
IPOs, 191, 233
IRS, 20, 129, 170, 358
“Is Enron Overpriced?,” 323
Isla, 18, 19, 21, 23
ISO (Independent System Operator), 266, 267, 268, 270, 271, 274, 276–78
Italy, 158
Jacobs, Irwin, 11, 12, 13, 162
Jaedicke, Robert, xiv, 20–21
Janus, 232, 340
J-Block, 50–51, 103–4, 111, 176, 375
J. C. Penney, 304
JEDI, 67, 127, 132, 138, 141, 168–69, 189, 190, 355, 364, 383–84
JEDI II, 176, 316
Jefferies & Company, 175
Jesus Christ, 424
Jobs, Steve, 230
Joint Committee on Taxation, 241
Jones, Lincoln, 51
Jordan, Carl, 358
Joyce, Mary, 373
J. P. Morgan, 159, 202, 230, 233
J. P. Morgan Chase, 159, 160, 301, 341, 387, 388, 389, 393, 395, 402–3, 404–5, 407, 410
junk bond ratings, 14, 224, 236, 237, 256, 394–95, 400, 403
Jusbasche, Michael, 253
Justice Department, U.S., xxiv, 408. 410–13, 415
Kafus, 130
Kaiser Permanente, 184
Kaminski, Vince, xiv, 192–93, 206, 228, 305, 306, 363, 373
Kaplan, Jana, 365, 371
Katy Interconnect, 38
Kean, Steve, 346
Kelly, Bob, xiv, 51, 54, 73, 75, 76, 103
Kelly, Emmett, 4
Kelsey, Robert, 194
Kinder, Anne, 25
Kinder, Rich, xiv, 46, 94–95, 105, 125–27, 148, 164, 171, 391
as Bush finance chairman, 88
CEO ambitions of, 97–99
departure of, 97–99, 100–101, 104, 110, 139, 160, 314, 362
ECT and, 56, 103
Kinder, Rich (cont.)
Enron Oil and, 18–22
Gas Bank and, 35
importance of, 86, 91–92, 93
McNeil’s marriage to, 97–98
Mark and, 73, 75, 77, 78–79, 82, 83–84
rise to prominence of, 24–26, 27
Skilling compared with, 107
Kinder Morgan, 98
King, Martin Luther, Jr., 424
Kirkland & Ellis, 311, 328
Kissinger, Henry, xxiv, 79, 367
Kitchen, Louise, xiv, 222–23, 333, 398, 404
Koch Industries, 65
Koenig, Mark, xiv, 322–23, 325, 345, 347, 360, 420–21
Komansky, David, 313
Kopper, Michael, xiv, 155, 161, 164, 166, 167, 168, 169, 212, 279, 305, 343, 354, 383–84, 400, 414
departure from Enron of, 330, 361
earnings and wealth of, 153, 169–70, 330, 413
guilty plea and deal of, 413
homosexuality of, 153, 384
LJM and, 192, 196–97, 198, 203–4, 210, 306, 311, 328, 330, 353, 364, 366, 376, 381
performance reviews of, 152–53
Korea, 354
Koslowski, Dennis, 182
Krautz, Mi
ke, xiv, 289, 294, 296, 415
indictment against, 412
Kristol, William, 240
Krugman, Paul, 240
Kuhn, Thomas, 230
Kynikos Associates, 319–21, 326, 348–49
Lake, Simeon, 419, 422, 423, 424, 429
Lanier, Bob, 423
Larry King Live, 417
Las Vegas, Nev., 425
Launer, Curt, xvii, 179, 232, 348, 353, 371, 407
Lavorato, John, xiv, 215–16, 226, 276, 282, 304, 398, 404
Lawson, William, 424
Lawyer, Larry, 289
Lay, Bonnie, 4
Lay, Elizabeth, 6, 367
Lay, Judith, xiv, 5–8
Lay, Ken, xiii, xxiii, 58, 100, 103, 108, 162, 215, 219, 222, 232–33, 326, 334, 341
on accounting practices, 39, 41, 146, 158
on Azurix, 247, 250, 251, 255, 257, 258
background of, 2, 72, 96
Beth Tilney and, 190
board of directors and, 96–99, 314, 344–45, 349–50, 402–4, 415–16
campaign contributions of, 173
charitable activities of, 3, 49, 85, 86, 96,
98
COO search by, 352–53
on corporate ethics, 240, 269, 275
on Dabhol, 80, 315
as deregulation advocate, 2–3, 172, 175, 240, 265, 267, 278, 281, 327
distance from Enron of, 85–86, 91, 101, 240
divorce of, 7–8, 27, 46
in Dynegy’s proposed acquisition, 392, 395–400, 402–3
early career of, 1, 5–14
earnings and wealth of, 7, 12, 89, 93, 98, 240, 313, 343
ECT and, 56
education of, 4–5, 9
EES supported by, 182
on Enron International, 259, 261–62
Enron Oil and, 15, 18–19, 21–24
in Enron’s collapse, 403–5
Enron stock promoted by, 242, 366–67, 417
in exit-strategy mode, 328, 342
on Fastow and financial structures, 134, 150, 169, 190, 193, 199, 289–90, 305, 370, 375–77
at Federal Power Commission, 6
financial problems of, 343–45, 367, 398, 416
at Florida Gas, 6–8, 10, 11, 19, 25, 46
Gas Bank and, 35
homes of, 7, 89, 96, 344, 392, 416
influence of, 172–73, 234–35, 291, 385
at Interior Department, 6–7, 24
Kopper unknown to, 153
management style of, 3, 24–25, 26, 45, 46, 75, 85, 89–90, 92, 101–2
Mark and, 73, 75, 79, 83, 84, 110, 111, 261–62
marriages of, see Lay, Judith; Lay, Linda
modest origins of, 3, 4, 28
on outside corporate boards, 86, 182, 344
at Pentagon, 5
as political donor and fund-raiser, 85, 87–88, 173
positive public statements made by, 121, 126, 133, 171, 177, 229, 259, 292, 379
religious background and beliefs of, 2, 3, 5, 385, 423
reputation of, 3, 85, 96, 230, 246
resignation of, 415
return to CEO position by, 347, 352–53, 355–62, 366–67, 369–70, 372–77, 384–86
rise to CEO of HNG by, 10
sense of personal entitlement of, 3–4, 91, 119
on share buyback program, 105
Skilling and, 59, 68, 118, 125, 176, 389
on Skilling as CEO, 342–43, 346–49
social prominence of, 86, 416, 423–24
stepping down as Enron CEO, 313–14
stock sold by, 320, 344, 367
and Teesside power plant, 48–49
in think tanks, 85, 87, 146
values of, 3, 89
Watkins’s letter to, 355–58
Wing and, 47–48, 52–54, 73
Lay, Linda, xiv, xxiii, 7–8, 10, 86, 89, 90, 98, 343, 367, 386, 398, 416, 422, 423
campaign contributions of, 87, 88
Lay, Mark, xiv, 6, 59, 90, 343, 385
Lay, Omer, 4
Lay, Robyn, xv, 90
Lay, Ruth, 4
Lay, Sharon, xv, 4, 90
Lay It on the Line survey, 372
Lay/Wittenberg Travel Agency in the Park,
90
LBO, 136–37
LeBoutillier, John, 31
Lee, James (Jimmy), xvii, 201, 389, 393, 395, 402
Leff, Dan, 179
Lehman Brothers, 154, 202, 353, 401
LeMaistre, Charles, xv, 96, 345, 370, 373, 374, 376–77, 404
Lerach, Bill, 410
Levitt, Arthur, 146
libertarians, 31
Library of Congress, 367
Limbaugh, Rush, 25
Linda and Ken Lay Family Foundation, 86
LJM, 189, 191–207, 209–11, 212, 231, 237, 238, 242, 261, 262, 277, 294, 305, 308, 310–12, 317, 327–30, 333, 345, 355, 361, 363–66, 370–71, 374–77, 408, 412, 414, 416, 421
annual meeting of, 311–12
Fastow’s sale of, 329–30, 353, 360,
365–66
SEC’s inquiry into, 371, 375
LJM1, 191, 193, 203, 210, 305, 330, 376, 384, 393
LJM2, 197–207, 209, 289, 294, 305–9, 312, 317, 328–29, 365, 370–71, 376, 381
LJM3, 209, 310, 330, 373
LJM Cayman, see LJM1
LJM Investment Activity, 1999, 206
LJM Swap Sub, 191, 193–96, 384, 412
LoChiano, Rocco, 11
Lockheed Martin, 178
Lockyer, Bill, 281
London School of Economics, 152
Long, Susan, see Skilling, Susan
Long-Term Capital Management, 219,
385
Los Angeles Department of Water and Power, 281
Los Angeles Times, 273, 280, 281, 429
Louisiana, 2, 38
Lowther, Mike, 317
Lucchetti, Aaron, 246
lumber trading, 225
Luntz, Frank, 372
Lynn, Kathy, xv, 152, 164
LJM and, 196–97, 204, 304, 355
MacArthur Foundation, 202
McConville, Kevin, xv, 130–31, 305, 308
McCullough, Robert, 277
McGlone, Denise, 140
McLane, Drayton, 423
Mack, Toni, xvii, 72, 94, 318–19
McKinsey, James, 31
McKinsey & Company, 9, 31–32
on Azurix, 256
Enron and, 106, 215, 239–40, 244–45,
280
peer review at, 63
Skilling at, 12, 31, 32–35, 55, 66, 68, 233
McLean, Bethany, 321–22
Maclin, Todd, 201
McLucas, William, xv, 390, 393–94, 399
McMahon, Jeff, xv, 152, 155, 204, 208–11, 237, 305, 355, 356, 358, 361, 411
as CFO, 377, 378–80, 389–90, 394–95, 398–99, 402, 405
McNealy, Scott, 243–44
McNeil, Nancy, xv, 86, 97–98
Madera County, Calif., 254–55
Maharashtra State Energy Board (MSEB), 80–83, 315
Mahonia, 159
Mandela, Nelson, xxiv, 240
Manufacturer’s Hanover, 162
margin calls, 343
Mariner Energy, 129–31, 414
Mark, Rebecca, xiii, 54, 77, 93, 94, 100, 158, 180, 409
appearance and personality of, 71–72
at Azurix, 113, 124, 246–63
Azurix termination of, 246, 257–58, 262–63
background and education of, 72–73
charm and drive of, 72, 76, 251
Dabhol project and, 70–84, 102, 409
earnings and compensation of, 78–79, 83, 111, 113, 138, 262, 397
Enron International resignation of, 112, 246
on Enron’s board of directors, 253, 261
as glamorous, 44, 70, 71–72, 79, 251
as high-profile woman, 70, 76
marketing expertise of, 76, 79, 82, 112, 252
marriages of, 73, 253
optimism of, 72, 78,
257
Skilling’s conflicts with, 71, 88–89, 100–101, 110–13, 180, 246–47, 250, 255–56, 258, 259–63, 315, 326
Wing’s relationship with, 44, 45, 52, 70, 73, 75
Mark, Thomas, 73
market capitalization, 185, 285
mark-to-market accounting, 39–42, 45, 60, 66, 78, 92, 94, 127, 131, 158, 181, 218, 227, 296, 303, 305, 318–20, 388
Marlin, 249–50, 253, 258, 341, 374, 380, 416
Martin, Amanda, xv, 38, 61, 118, 121–23, 134, 337
at Azurix, 124, 250, 252, 253, 260
Rice’s relationship with, 123–24, 186–87, 213
Masters golf tournament, 139, 146–47
Mastroeni, Thomas, xv, 17–21, 23–24
Matthews, M. D., 10
Maxey, R. Davis, xv, 128–29, 163
M. D. Anderson Cancer Center, 96
Meade, Andre, xvii, 235, 321, 326
meat futures, 226
Meeker, Mary, 231
Melcher, Patty, 166
Meringolo, Peter, 275–76
Merrill Lynch, 165, 180, 190, 197, 200, 201–2, 206–9, 222, 231, 234–35, 242, 244, 251, 252, 300, 311, 313, 320, 348, 360, 370, 381, 410–11
Mertensotto, Bob, 160
metals trading, 225, 333, 396
methane, 1
Microsoft, 56, 93, 224, 226, 230, 313
Milken, Michael, 17, 412
Millett, Doug, 321
minority-interest financings, 155, 157
see also specific entities
Mintz, Jordan, xv, 327–29, 401
Mirant, 220, 277, 283
Missouri, University of, 4–5, 8, 25, 98
Mobil, 241
momentum investors, 232, 318
momentum portfolio managers, 232
monetization, 182, 293, 296, 368, 378
money-market funds, 236
Montana Power, 271
Moody’s, 14, 80, 236–38, 260, 273, 279, 282, 373, 380, 394–95, 403, 407
Mordaunt, Kristina, xv, 152, 297, 335
LJM and, 196–97, 355, 394
Morgan, Bill, 8, 25, 98
Morgan Stanley, 63, 102, 164, 220, 231
Morocco, 339
Morton, Rogers, 6
Mosbacher, Robert, 87, 96, 423
Motley Fool, 281
Mozambique, 74, 259
Mozillo, Angelo, 427–28
MTBE, 104
Muckleroy, Mike, xv, 21–23
Mulgrew, Gary, xvi, 194–96, 365, 384
Mulva, James, 104
municipal bonds, 343
mutual funds, 232, 319
NAPCON (North American Power
Consortium), 107
Napoleon III, emperor of France, 248
National League, 86
natural gas, 1–2, 8, 33–34, 36, 79, 109, 159, 172, 225, 244, 248, 278, 300, 345
distribution of, 258
futures in, 38, 39, 105, 223, 284
market for, 126
marketing of, 280
pipelines, see pipelines
prices, 88, 109, 409
producers of, 35, 36, 105
supply deals in, 49, 61
traders and trading in, 37, 38, 56–69, 105–6, 110, 171, 224, 243, 284, 339, 396, 397